Sprint Nextel fogives early termination fee for government subscribers
By Will Park on Monday, June 16th, 2008 at 12:22 PM PST In Announcements, Financial/Corporate News, Sprint
It seems that early termination fees (ETF) are getting more and more media coverage as of late. We’ve made it quite clear that we don’t like ETFs, and with the FCC having whetted their ETF-appetite with their own investigation in to eliminating contract-termination fees, Sprint (NYSE: S) Nextel has made the move to eliminate ETFs for its government-users.
Government employees would “never, never accept such penalty amounts,” according to Nextel’s then-VP Scott Wiener. And, so, Sprint Nextel has nixed the dreaded ETF for any subscriber toiling away at their bureaucratic government job in some in some nondescript with no windows.
Unfortunately, while Sprint seems to think that government-types won’t just lie down and pay those ridiculous ETFs, it looks like the No. 3 US wireless carrier views us regular subscribers as push overs. At least Sprint will be launching pro-rated ETFs…
[Via: FOXnews]
I work in the wireless industry, and while I agree that ETF’s can be onerous, consider the fact that on average it takes a wireless company 8 months to a year to make a penny off a new customer. This is because of the subsidizing of phones. So while it’s definitely the carrier’s responsibility to keep the customer happy and wanting to stay, there’s a huge risk in giving away practically free phones and letting customers just cancel after, say, three months. You’d end up with a monopoly in the business (basically the last company standing), and suddenly prices would skyrocket. Just the inconvenient truth about how the industry works…