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Verizon Finds a Way to Make its ETFs More Expensive
Verizon has quietly made a change to their wireless plans that will make it much more expensive to cancel your plan during the first eight months of a two-year contract. According to a post at Droid Life, Verizon's old early termination fee (ETF) model saw your ETF reduced by $10 for each full month of a completed contract term. Under Verizon's new plan, you won't start seeing a reduction in your ETF until after month eight, resulting in users paying significantly more if they leave earlier. It's worth noting that Verizon's new policy only impacts users who sign a contract after November 14.
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bigballer
join:2014-09-25

bigballer

Member

whose going to be paying for this?

Tmobile of course.

Just another way to add pain to them

ctaranto
join:2011-12-14
MA

1 recommendation

ctaranto

Member

Re: whose going to be paying for this?

Perhaps, but how many *new* Verizon customers are switching to Tmo?

When I switched, all my lines were at least 1 year into the contract. TMo has been running their current promotion for a long time, and I'd guess most Verizon customers who are sick of paying too much for mobile service have already switched.

This is more of a money grab for them than it is to hurt TMo.
klineba
join:2010-08-30
Perrysville, OH

klineba

Member

No Contract

No problem

IPPlanMan
Holy Cable Modem Batman
join:2000-09-20
Washington, DC

1 recommendation

IPPlanMan

Member

Not surprised...

Everything at Verizon is getting worse and worse. You can't win either way.

1) EDGE now requires you pay off 75% of the device, up from 50%.
2) 2-year contract has a ridiculously high line charge and now the ETF doesn't Pro-rate until the eighth month.
3) Individual Data Plans only go to 2GB and then you pay overages. Otherwise, no escaping Shared Data.
4) To keep Unlimited Data you have to pay Full Retail Price.

Yup, I won't be a Verizon Customer anytime soon.
bigballer
join:2014-09-25

bigballer

Member

Re: Not surprised...

we're waiting for you over at tmobile

IPPlanMan
Holy Cable Modem Batman
join:2000-09-20
Washington, DC

IPPlanMan

Member

Re: Not surprised...

It's certainly possible that could happen, but not anytime soon.

I'm currently with Sprint. We have 5 lines on the "Unlimited My Way" Family Plan with the "Unlimited Talk/Text/Data for Life" Guarantee. Add in a 22% corporate discount and we're all very happy.

I'm grateful for T-Mobile. They dragged the entire industry kicking and screaming into the modern era. Even though I'm not one of their customers currently, I've benefited.
Chuck_IV
join:2003-11-18
Connecticut

Chuck_IV

Member

Re: Not surprised...

said by IPPlanMan:

I'm grateful for T-Mobile. They dragged the entire industry kicking and screaming into the modern era. Even though I'm not one of their customers currently, I've benefited.

Agreed. No way I could go with TMobile myself due to their serious lack of anything high speed in my area(only 2G... ouch) and areas I travel, but they have helped wake up the big boys to just(so far) a "little" competition. Hopefully it will continue.

IPPlanMan
Holy Cable Modem Batman
join:2000-09-20
Washington, DC

1 edit

IPPlanMan

Member

Re: Not surprised...

T-Mobile is supposed to have its 2G replaced with LTE by Mid-2015, and they're working quickly!

»newsroom.t-mobile.com/is ··· dule.htm
"We're now on track to cover 280 million people with 4G LTE by mid-2015, and, I'm telling you today, we expect to hit the 300 million mark by the end of 2015."

From earlier this year:
»newsroom.t-mobile.com/ne ··· gram.htm
"......T-Mobile is now kicking off a major new program to upgrade its 2G/EDGE network with 4G LTE. The company plans to complete 50 percent of the work this year alone, and expects the program to be substantially complete by the middle of next year."

T-Mobile has a history of running ahead of schedule.
elefante72
join:2010-12-03
East Amherst, NY

elefante72

Member

Re: Not surprised...

They have really progressed, especially w/ 4G coverage. My house in the sticks now has 4G coverage from all carriers (Sprint was the last).

I will say Sprint is finally stepping up too. Moved the kids over to Sprint, and as usual voice calling is the best of all carriers. It just sounds great.

I have verizon and tmo hotspots and over the last year the TMO hotspot has been blowing away my verizon one, especially in airports (Verizon is practically useless in major airports). I dont even take my verizon HS on trips anymore, and I can go into Canada and roam without taking a bath. Verizon wants $25 per 100 meg. When I laughed, the rep said it was good because it was down from $50 per 100 MB.

IPPlanMan
Holy Cable Modem Batman
join:2000-09-20
Washington, DC

IPPlanMan

Member

Re: Not surprised...

The HD voice quality on Sprint is amazing. Even the regular definition calls sound clear. I do wish they'd hurry up and launch WiFi calling for my iPhone 6. (They currently support Android)

Sprint is definitely back in the game. Hesse left the place in ruins. Marcelo Claure is kicking things into high gear with SoftBank's full backing and support. They will be a force to be reckoned with.

These changes by Verizon show they're taking notice.
elefante72
join:2010-12-03
East Amherst, NY

elefante72 to bigballer

Member

to bigballer
First off, they are all going that way. These companies are not charitable trusts, and sooner or later it will catch up to Apple charging $600+ for last years components.

The quants had this is mind from day 1. Start off and sucker the population from full subsidized to rent-a-center, and then slowly pull back until they are paying practically retail, then they are paying for a fully blown profitable lease. Surely you knew the party would end.

For wireless carriers, the only variable will be data and that is where the money is, along with mining your data. Secondarily they are all clamoring to get into the mobile pay arena, but since they have been douchbags about it, they will probably get passed by. And now they are tinkering with sports/real-time. They have a shot there.

Or you can buy a new "used" LG G2 for $199 off of ebay and call it a day. That phone is plenty fast, has XLTE, and will be getting lollipop. And if Verizon beefs with me, I can take it to the other PREPAID carriers. Even the G3 can be had for $300 if you are keen on really new. I can't believe how much better and faster it is than my iphone 5.

However to do this (and save money) you need to dump Apple stuff because resale does not follow normal electronics decay.

I'm sorry but since this foolishness started I just buy 1 year old refurbs off of ebay for significant savings and keep for a year or two and resell.

Last month I bought my daughter a Samsung Galaxy III for $105 which was practically brand new.

For people on unlimited plans, I tell them where to buy phones off of ebay or swappa. Not rocket science.

And I can afford new phones, but refuse to throw hundreds of dollars away to have the latest tech.

IPPlanMan
Holy Cable Modem Batman
join:2000-09-20
Washington, DC

2 edits

IPPlanMan

Member

Re: Not surprised...

That's certainly a creative approach to deal with Verizon.

Question: What's the residual value on those resold devices?

The true cost of a device is what you buy and sell it for. A cheaper device which depreciates to zero can be more expensive to own than a more expensive device which depreciates less and has a higher resale value.
bigballer
join:2014-09-25

bigballer to elefante72

Member

to elefante72
Yep, I only buy used phones or cheap phones like one+ or nexus 5 (nexus 6 is way too expensive.)

Phones are cheaper, bills are cheaper. I'm happy. I pay $110 to tmobile for 5 lines with 4/5 lines being nexus 5 and one being one+
itguy05
join:2005-06-17
Carlisle, PA

2 edits

itguy05 to elefante72

Member

to elefante72
said by elefante72:

These companies are not charitable trusts, and sooner or later it will catch up to Apple charging $600+ for last years components.

And those "last year's components" tend to be as good as or better than today's Android flagships. In both day to day use and benchmarks.
quote:
However to do this (and save money) you need to dump Apple stuff because resale does not follow normal electronics decay.
And I'm about to dump this GS5 I have because it, like my previous dabble in Android, well sucks.

It stutters playing music over BT a lot. Like a phone with Turrets. (common complaint)
It reboots itself when it wants to (common complaint)
It lags badly at times.

I'm hoping Lollipop fixes some of this but I'm not hopeful. My iPhone 4s seemed better than this, and this thing is the latest Quad core, 2GB RAM, monster....
clone (banned)
join:2000-12-11
Portage, IN

1 recommendation

clone (banned)

Member

Re: Not surprised...

I still, to this day, have absolutely no idea how Samsung became the de-facto Android flagship. They make absolutely abysmal garbage for hardware, the software (as you've unfortunately seen) isn't much beter. Don't blame Android!

As far as Android handsets go, I've owned the Original Moto Droid, a Droid 2, a Droid X, a Droid RAZR, an HTC Droid DNA, a Galaxy S III, a Droid RAZR HD MAXX, a Galaxy S4, an LG G2 and now a G3. Other than the original Droid RAZR, the worst phones hands-down were the SIII and S4.

The Motorolas may have had crappy cameras (and poor LTE on the 1st Gen RAZR which was corrected with the HD series), and the HTC had bad battery life, but only the Samsungs could do things like drop calls while I'm sitting outside in a park, reboot randomly during use, and need a daily reboot (if it didn't do it by itself) to cure performance issues.

If you want a real Android experience, try a Droid MAXX, Moto X, Droid Turbo, or any of the flagship LGs or the HTC One. Basically, anything except Samsung. I can almost guarantee you'll be more satisfied.
itguy05
join:2005-06-17
Carlisle, PA

itguy05

Member

Re: Not surprised...

This is my second go at Android and I was hopeful. 1st shot was a Droid X and it was garbage too. Did a lot of the same things after while.

I almost got an HTC One M8 but didn't like the dialer and the lack of band 2 LTE on T-Mobile killed that for me.

Actually, I'm not that happy with the Google Ecosystem. Too fragmented and just a poor experience at this time. Maybe Lollipop will fix it and I'll see how that goes before passing judgement.

Selenia
Gentoo Convert
Premium Member
join:2006-09-22
Fort Smith, AR

Selenia to clone

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to clone
Same reason the iphone got big. They are visually appealing and stylish. I gave up on Samsung after my 2nd smartphone from them. My Galaxy S had to be returned 3x only to give up charging after warranty. My S2 twice and same charge issue. I have ancient HTC phones and ASUS tablets that just keep on going trouble free. The Wildfire S inexplicably got corrupted and stopped booting, but reflashed and is has been going for a couple years since. I have Kit Kat on it and it is my carry around phone for business trips where I just need a good sounding phone and simple apps to get information.

Rambo76098
join:2003-02-21
Columbus, OH

Rambo76098 to clone

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to clone
I would agree with you, Samsung phones I've had were crap. I'll probably buy a used HTC One M8, LG G3, or Moto X/Droid Turbo once I get tired of my current gen 1 Moto X.

IPPlanMan
Holy Cable Modem Batman
join:2000-09-20
Washington, DC

IPPlanMan to elefante72

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to elefante72
The iPhone 6/6 Plus don't have last year's components.
primeomega
join:2004-03-11
De Pere, WI

primeomega

Member

ETF will be gone soon anyhow

With all the wireless providers moving to billing your phone out over 24 (or so) months, I be it's not long when you are no longer able to get a 2 year contract. My guess if I am so bold, this Black Friday will be the last time you see 1 cent phones with a new 2 year.

IPPlanMan
Holy Cable Modem Batman
join:2000-09-20
Washington, DC

IPPlanMan

Member

Re: ETF will be gone soon anyhow

A much higher percentage of AT&T customers are on NEXT compared to the percentage of Verizon customers who are on EDGE.

»www.fiercewireless.com/s ··· 14-10-14

Sales of Verizon's Edge program continue to trail those of rival AT&T Mobility. AT&T has said it expects around half of all its new customers in the third quarter to choose its Next handset financing plan. By contrast, only 18 percent of Verizon customers used Edge in the second quarter.

Anon1958
@50.180.37.x

2 recommendations

Anon1958

Anon

Re: ETF will be gone soon anyhow

I can tell you exactly why that is. Disclaimer: I work for an authorized retailer selling AT&T, Verizon, and Sprint. I have worked there for almost exactly 2 years now (god that's depressing now that I type it out...)

AT&T is enjoying that high percentage because they essentially tricked their entire customer base. Ever since they launched the Mobile Share Value 2.0 plans several months ago ("4 lines for $160"), they hit up every single one of their customers and tried to get them to switch to the 10 GB share plan. They even managed to switch over a LOT of their grandfathered Unlimited Data users because of the lower monthly cost.

The key is that every phone purchased with a contract before 2/2/2014 gets the $15 "out of contract" pricing on the service rather than the $40 access charge they "should" be paying. This is only a problem because they told nobody, and I mean nobody, that it was only a temporary discount that goes away if they upgrade on contract again. For the past several months, I've been dealing with customers who come in expecting to only pay $200 for the latest flagship phone and still keep their out-of-contract pricing, and I have to be the "bad guy" by explaining that their bill is going to go up if they buy that phone. Maybe a few representatives here and there were honest about the whole thing, but from my experience that simply didn't happen most of the time. It's really sad that once I explain it, I'm met with the response of "Well that's just typical of AT&T" far too often.

Thus, since everybody is already on the 10 GB plan, they go with the NEXT program for their phone upgrade. Mathematically it works out better for them, when you look at the total cost over 2 years. I'm using the Galaxy S5 as an example here. It's either "pay $200 today and a $40 upgrade fee and $25 more per month for 2 years" for a contract, or "pay sales tax today and $0 upgrade fee and $27 more per month for 2 years" on NEXT. It's a no-brainer at that point.

Verizon was aggressive in getting people on their Share Everything plans, but not necessarily the 10 GB plan in particular. They also did not give people the out-of-contract pricing early like AT&T did. Most of their customers are on a Share Everything plan between 1 GB and 4 GB and are paying the full $40 per line. When people come in to upgrade, it would cost too much to bump up the data plan to the 10 GB package just to get the bigger out-of-contract discount, so most of their customers just continued with the 2-year contract on a lower data plan.

That is changing, however. Verizon wised up and changed their pricing ~2 weeks ago, and the 10 GB plan is now only $80 and you still get the full $25 out-of-contract discount. Many of the iPhone orders we placed a month ago were originally going to be a contract upgrade, but with the new changes they're now going on EDGE instead. I expect their EDGE percentage to increase from 18% dramatically in the next few months, but it's just a little too early to tell right now.

Sorry for the wall of text.

IPPlanMan
Holy Cable Modem Batman
join:2000-09-20
Washington, DC

IPPlanMan

Member

Re: ETF will be gone soon anyhow

Very interesting. Thanks for sharing!
Tristan
join:2006-09-10
Nepean, ON

Tristan

Member

Not surprised

It's definitely a tactic to prevent customers from leaving for other services when they've been duped into believing that Verizon is a good service provider.

Of course, it's easier to raise rates and ETF's, than it is to turn an organization inside-out, shake it all about, and make real, substantial improvements.

That sort of move clearly shows Verizon would rather be a bully, than your friend.

IPPlanMan
Holy Cable Modem Batman
join:2000-09-20
Washington, DC

1 edit

IPPlanMan

Member

Re: Not surprised

said by Tristan:

That sort of move clearly shows Verizon would rather be a bully, than your friend.

It means Verizon is scared. Good.

Majestik
World Traveler
Premium Member
join:2001-05-11
Tulsa, OK

Majestik

Premium Member

Re: Not surprised

I've read every post on this thread just now. You say they are scared and seem satisfied of that.
I see totally different.

If you guys were more of an investor than consumer this wouldn't be a much of a problem.
Verizon has increased their quarterly dividend this past quarter. And has a dividend yield over 4%.

IPPlanMan
Holy Cable Modem Batman
join:2000-09-20
Washington, DC

IPPlanMan

Member

Re: Not surprised

said by Majestik:

If you guys were more of an investor than consumer this wouldn't be a much of a problem.
Verizon has increased their quarterly dividend this past quarter. And has a dividend yield over 4%.

I didn't realize we were discussing stocks, but ok, I'll bite.
AT&T's yield is 5.15%, higher than Verizon's which is 4.30%. So what are you saying?

Majestik
World Traveler
Premium Member
join:2001-05-11
Tulsa, OK

1 edit

Majestik

Premium Member

Re: Not surprised

You say that you can't win either way with Verizon. Yes you can.
People don't have to but if they want to pay so much for cell phones might as well get paid in return with dividends. These companies will do what they have to do to make money. Go for the ride. Life is a little bit less stressful.
Heck from what I've read on here yesterday Verizon is already profiting off of thier customers with super cookies on top of everything else.

I'm glad you brought up AT&T. Hope you own shares.
I have the $30/mo. grandfathered unlimited data ipad 4 LTE and $56/mo. for my grandfathered but over 4 times this total per month in AT&T reinvested dividends in my Roth.
One of the guys in my investment group use part of his dividends to pay his entire Uverse package.

IPPlanMan
Holy Cable Modem Batman
join:2000-09-20
Washington, DC

IPPlanMan

Member

Re: Not surprised

Sounds good. I do own AT&T stock (as well as a bunch of Apple). Pays for my Sprint service and then some. I also own Sprint. Got a bunch when it hit near $2.00/share before the buyout by SoftBank.

Majestik
World Traveler
Premium Member
join:2001-05-11
Tulsa, OK

Majestik

Premium Member

Re: Not surprised

Well there you go. That's how you play the game.

IPPlanMan
Holy Cable Modem Batman
join:2000-09-20
Washington, DC

IPPlanMan

Member

Re: Not surprised

Gotta play to pay!

cork1958
Cork
Premium Member
join:2000-02-26

cork1958 to IPPlanMan

Premium Member

to IPPlanMan
Glad you people are comparing AT&T and Verizon because in my mind, they both absolutely blow chunks and are 2 of the biggest rip off artists and dishonest companies to do business with ever.

Won't EVER use either of those and frankly, I wish they'd both go out of business! I know that's not happening, but I can wish!!
amungus
Premium Member
join:2004-11-26
America

amungus

Premium Member

this deal is getting worse all the time!

The kicker is renewals. I'm just over a year in.

Do I really want to sign another 2yr contract with an ETF that steep, that doesn't even start to drop for until after 8 months? Highly doubtful. I'd rather buy a device off of eBay, or pay interest over a few months on a credit card for a full priced device.

IPPlanMan
Holy Cable Modem Batman
join:2000-09-20
Washington, DC

1 edit

IPPlanMan

Member

Re: this deal is getting worse all the time!

Verizon is basically daring you to do a 2 Year Contract with them.
This is pretty bold considering 82% of their customers are not on EDGE and that it's been offered for some time.
tmc8080
join:2004-04-24
Brooklyn, NY

tmc8080

Member

better yet.. don't sign up!!

don't sign a contract for post paid!!!
that sleek looking "FREE" phone is really not "FREE" or cheap without the gotchas!
it comes with service costs of thousands of dollars over the course of 2 years for that phone which will be "OBSOLETE JUNK" in 2 years' time.

there are services like tracfone which offer prepaid buckets that use Verizon service as well.. if you really have the signal issues or quality issues with other carriers. also other mvno's have unlimited offers too..

there is some sanity coming back to the customer purchased handset prices.. but if you keep letting a Verizon or ATT dictate how artificially high an Iphone must be to accommodate subsidy then ALL OF US pay the price in higher cost of services (right down the cost of that $5 tracfone and prepaid minutes).

IowaCowboy
Lost in the Supermarket
Premium Member
join:2010-10-16
Springfield, MA

IowaCowboy

Premium Member

Because of fraud

I've heard a common scam against wireless carriers, particularly with iPhones is to buy the device on contract with subsidy and then cancel the service two weeks later, pay the ETF and sell the device for a profit.

I think the wireless carriers should charge start at 75 percent of the full retail cost of the device you are purchasing on subsidy and reduce it by 5 percent for every completed month of the contract you complete for ETF. Watch how fast this scam against carriers dies. That's why carriers don't like subsidies, they buy devices on subsidy and cancel the service.

Thinkdiff
MVM,
join:2001-08-07
Bronx, NY

2 edits

Thinkdiff

MVM,

Re: Because of fraud

It's not a scam or fraud.. That's the wireless carrier's decision, which would seem to indicate it's not as popular an option as you may have heard. You are allowed to break your contract for $350 (on VZW), so combining that with the purchase price + a few weeks of service.. you're not really making much profit, if any at all.

Why would you advocate for making the ETF penalty even larger, especially 75% where it would be larger than the retail price of the phone ($199 up front + $486 ETF = $685)?

This seems much more about deterring people from switching carriers and has the lovely side-benefit of costing Sprint/T-Mobile more money when they "pay your ETF".

cb14
join:2013-02-04
Miami Beach, FL

cb14

Member

Just give it to them

Whoever signs up for a 2 years plan with Verizon wireless now deserves this.
Body Count
join:2010-09-11
Columbus, OH
Netgear CM1000
Ubiquiti EdgeRouter ER-4
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Body Count

Member

glad i'm gone

Glad I'm no longer with Verizon. Next month will be my first full year away from Verizon.

Went with T-Mobile and so far I'm very happy. It sucks when I travel because T-Mobile doesn't have the tower support on the highways like Verizon did but I can live with it since my bill is $35 less than I was paying and I'm getting more data.

The biggest drawback I saw with Verizon was that after your two years was up, you were still paying the same amount on your plan. With T-Mobile if you have 0% loan on the price of the phone like I do, after two years the phone is paid off and your bill goes down. Basically Verizon forced you to get another phone (and new contract) or you would be throwing away money.