AT&T Mobility (NYSE:T) plans to raise its early termination fee for smartphones and netbooks from $175 to $325, effective June 1. The change comes just ahead of Apple's (NASDAQ: AAPL) expected launch of the next iPhone, and amid continuing speculation over when AT&T might lose its exclusive hold on the popular smartphone.
Additionally, AT&T said it will drop the ETF on feature and messaging phones from $175 to $150. Both of the changes do not affect current customers, but will be applied to new and renewing subscribers. The ETFs are pro-rated, and drop $10 per month.
Despite persistent speculation that AT&T will lose its iPhone exclusivity, an AT&T spokesman told AllThingsD that the move has "nothing to do with the iPhone or any other device."
Recently, the FCC has increased its scrutiny of wireless carriers' ETF policies to see whether they harm consumers. Carriers defend the policies as a way to provide the newest handsets to customers at subsidized prices while ensuring they can recoup the expense of those subsidies if customers break their contracts early.
Last November, Verizon Wireless (NYSE:VZ) announced it would raise its ETF from $175 to $350 for what it termed "advanced devices," which include some netbooks and smartphones. In January, the FCC sent letters to the four Tier 1 wireless carriers as well as Google, asking them to explain in detail their ETF policies for handsets. In responses in February, the companies defended their practices, arguing they are transparent about the terms of the fees and that ETFs protect device subsidies.
For more:
- see this AT&T letter
- see this Dow Jones Newswires article (sub. req.)
- see this AllThingsD post
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