Wednesday, October 22, 2008

Wireless Contract Update: Sprint to Prorate Early Termination Fee

Here's some great news for all Sprint subscribers. According to an AP article, Sprint is planning to follow other mobile phone carrier's with pro-rated Early Termination Feesor ETF's.

Now ETF's are probably the most controversial aspect of mobile phone contracts because they prevent customers from moving to another carrier before their existing contracts expired. In the past, national and regional US carriers used to charge a flat rate of around $150 to customers who want to get out of a contract before it expired.

Carriers impose this wireless contract policy to recover the cost of subsidized cell phones and to reduce the expense spent on signing up new customers. Of course, subscribers and consumers are no fans of ETF's because it restricts their freedom to move to other carriers and the fee is quite expensive for those who have multiple handsets or phone lines.

Fortunately, many of these carriers have decided to prorate the Early Termination Fees that bind their customers to their existing wireless contracts. And Sprint seems to be on the verge of deciding to prorate its Early Termination Fee. But what is a prorated ETF anyway?

A contract with a prorated ETF will charge a reduced reduce the fee based on each month a subscriber stays with the plan. This means that a subscriber who has stayed with a contract for 14 months will pay less than a customer who wants to opt out of a contract after three months. The less number of months remaining in a contract, the lower the Early Termination Fee.

Sprint's plans to reduce their ETF charges was revealed by CEO Dan Hesse during an an interview. Hesse indicated that the wireless carrier will be able to implement a prorated early termination fee system as early as December.

Sprint CEO Dan Hesse explained that a new billing software should first be put in place before the prorated early termination fee system can operate. Customers will be able to benefit from Once is has the new software in place, it will deduct a small amount of money from the $200 ETF for each month that a subscriber stays with the plan.

I thin that this is a great update. One that many Sprint subscribers have been hoping for and they won't have to wait long. Sprint has been facing a lot of disputes and lawsuits based on ETF and perhaps this decision will provide a solution. Tune in to this blog for more information on wireless contract policies.

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