Are the big wireless carriers about to start competing on service and customer satisfaction? Maybe that is what prompted AT&T's recent announcement that it will begin to replace its $175 early termination with a pro-rated fee. The company also said that it intends to end its practice of requiring that subscribers extend their service contracts when they switch calling plans.
These contract extension requirement changes are expected to go into effect in November, and the prorated early-termination fee policy will begin in early 2008. One caveat to the pro-rated early termination fee change is that it will only apply to new and renewing subscribers who sign a one or two-year agreement after the change takes effect. AT&T did not explain how it plans to pro-rate its $175 early termination fees. AT&T's changes follow closely on the heels of a similar policy shift by Verizon Wireless. Verizon pro-rates its early termination fee at a rate of $5 per month, which means that even if a subscriber cancels their contract one month prior to the end of a two-tear service agreement, they are still liable for a $60 early termination fee.
As the cellular marketplace matures (there are now more cell phone lines than landlines in the U.S.), consumers have come to expect more from their carriers in terms of quality of service and customer service. In the past wireless carriers focused more on signing up new customers. Today, they appear to be shifting their resources toward providing better service to existing subscribers and so reducing the number of subscribers switching carriers (known as ?churn? in the industry). From a consumer point of view, the changes are welcome ones.
Source: Telecommunications Research and Action Center. http://www.trac.org
