AT&T Explains Increased ETF With Letter [AT&T Open Letter Blame Higher ETFs On Their Need To Provide Competitive Prices]

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A few days ago, AT&T offended everybody when they raised ETF (early termination fees) for all phones on new contracts, starting June 1st. Conspiracy theorists thought that it had something to do with the iPhone (what doesn’t these days) and it was reported across the web as “AT&T knows their going to lose customers due to a Verizon iPhone so they’re racking up the ETF”.

For those who missed it, starting June 1st, new AT&T contracts will have a higher ETF. For a featurephone, it will increase from $150 to $175 while on a smartphone, it will increase from $250 to $375 (!)

Here’s the full letter, in it’s entirety. I don’t think this is proof that a Verizon iPhone is coming. This is just one of those fees that companies raise from time to time.

An Open Letter to our Valued Customers

May 21, 2010

At AT&T, we work hard every day to provide you with a great wireless experience at competitive prices.

One of the ways we do this is to offer you the industry’s leading wireless handsets below their full retail price when you sign a two-year service agreement. In the event you wish to cancel service before your two-year agreement expires, you agree to pay a prorated early termination fee (ETF) as an alternative way to complete your agreement. Of course, if you prefer not to enter into a term commitment, we offer the same great selection of devices at their full retail price with no term commitment or ETF, as well as prepaid GoPhone options.

We are now making changes that will lower the ETF for many customers who agree to new term commitments, and will increase it for others. Current AT&T wireless customers who are within their two-year consumer service agreement or have an existing enterprise service agreement will see no change to their current terms.

Beginning June 1, 2010, we will reduce the ETF in new and upgrade two-year service agreements for all customers who are buying basic and quick messaging phones. Whether you are new to us or upgrading handsets, the ETF will decrease to $150 from $175, and be reduced by $4 for each month that you remain with us as a customer during the balance of your two-year service agreement. After the term commitment is completed, the ETF will no longer apply.

For customers who enter into new two-year service agreements in connection with the purchase of our more advanced, higher end devices, including netbooks and smartphones, the ETF will increase to $325, and be reduced by $10 for each month that you remain with us as a customer during the balance of your two-year service agreement. After that, the ETF will no longer apply.

Thank you for being an AT&T customer. We hope you enjoy your AT&T wireless device and service. We appreciate your business and we will continue to work hard to earn it.

What do you think? Is AT&T off their rocker? Does this make you think twice about signing an AT&T contract?

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