AT&T raising ETFs to $325 in June

AT&T will be raising its early-termination fees to $325 in June in what could be an effort to keep iPhone users locked in.

The company will be raising its ETF (the fee you pay when you break your service contract) from $175 to $325 beginning in June, which is right around the time the iPhone 4G/HD is expected to be released. The raised fee will apply to new contracts only and the ETF on feature phones will actually drop to $150. Re-upping your contract for a new iPhone will put you in this new ETF territory, though.

This is obviously a pain in the behind but I kind of understand where AT&T is coming from. The iPhone 4G/HD will probably have an entry point of $199 even thought AT&T is paying roughly $500 to $600 per unit. When you multiply that out by how many people are going to buy it, that’s a lot of cheddar in subsidies. Sure, they should earn it back eventually with the mobile data services of these users but this can put a pinch on its immediate bottom line. It’s a bigger pain for AT&T because many iPhone owners upgrade to the latest version every year and they get upset when they can’t get that standard, introductory price.

The move comes a few months after Verizon jacked up its ETF to $350 for “advanced devices” for similar reasons. The added spice to the story is that the iPhone-to-Verizon rumors have been heating up lately and the raised ETF could be another deterrent for current AT&T customers to switch if Apple goes with Big Red this year.

Could this be a sign that AT&T’s exclusivity with the iPhone is running out? AT&T doesn’t seem too worried about the possibility and I would still put down money that we won’t see Big Red getting the iPhone until at least 2011.

[Via The Wall Street Journal (subscription required)]