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Summary:

AT&T has raised its Early Termination Fee to $350 from the $175 it is now charging. AT&T could be anticipating that some customers who love the iPhone but hate the network will jump ship, lending credence to rumors that the iPhone may hit other carriers soon.

iphone-3gs

GigaOM reports that AT&T has raised its Early Termination Fee to $350 from the $175 it is now charging. The new fee goes into effect on June 1 so there’s not much time remaining to jump ship. This move by AT&T follows Verizon’s jump to $350, a move Big Red had to justify to the FCC. ETFs are the mechanism carriers use to keep customers from jumping ship prior to the end of the original service contract, which is typically 2 years.

The timing of the AT&T move leaves one to wonder if the carrier is about to lose exclusivity for the carrying the iPhone in the U.S. The rumors that the iPhone is going to Verizon and other carriers have been around for a long time and Apple is expected to announce the next generation iPhone in just a few weeks. AT&T could be anticipating the willingness of customers who love the iPhone but hate the network to jump ship.

Related GigaOM Pro Content (sub req’d): How AT&T Will Deal With iPad Data Traffic

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  1. $350 + subsidized handset price = unlocked handset price

    I have to wonder how much longer this practice will continue in the US, especially when buying unlocked lets you choose carriers AND frees you of any payment obligations.

    It’s ironic that the word freedom is beginning to mean less and less. The FCC would do better advocating consumer choice rather than encouraging corporate greed.

  2. James, go read the ATT press release/letter. This will not effect current iPhone owners only thoses who purhase smartphones after June 1. So this is not to deter CURRENT iPhone owners but those who buy next month.

  3. I hadn’t thought about the iphone defection – nice insight.

    I still don’t get how they can sorta-prorate these ETFs. $350 prorated at $10/month still costs you $120 to leave 23 months into your 2 year deal. I don’t see how a carrier can argue that is a necessary to recoup that much in phone subsidy.

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