Sprint Realizes That People Hate Forced Contracts, Early Termination Fees

from the making-it-a-choice dept

Fri, Sep 28th 2007 9:57am — Mike Masnick

It's become quite clear that people absolutely hate the forced two year contracts and early termination fees from mobile operators. It appears that some of the operators are finally getting the message. In discussing how it's going to offer its eventual WiMax offering, Sprint is now saying that there will be no mandatory contracts with early termination fees -- instead, it will be voluntary, based on a sliding price scale. In other words, if you're willing to take a longer contract, it'll be much cheaper. If you don't want a contract, that's fine, but you'll pay more per month. That seems perfectly reasonable and fits with typical pricing systems that lets the customer figure out how much the flexibility is worth to them. It's about time someone started offering this. Hopefully the other operators take the hint and start offering something similar for their regular phone service.

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Filed Under: contracts, early termination fees, wireless
Companies: sprint

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Anonymous Coward, 28 Sep 2007 @ 10:29am

Subsidies
If contracts are designed to recover costs associated with subsidizing the handset, why does this proposal involve a monthly service price change. Can't they just stick with making the phone more expensive for a shorter contract?
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ballstein, 28 Sep 2007 @ 10:29am

Also, i left sprint because of this. I am now with verizon and I couldn't be happier. Hopefully every operator will get the hint....
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TasMot, 28 Sep 2007 @ 10:37am

A lookback at Sprint
If you look back, in 1978 when I first got a Sprint phone, there was no contract at all (it was advertised as a benefit of being a Sprint customer). Now, they just charge more if there isn't one. Funny, if there service was good enough then why would anyone not want to stay. Oh well, I waited out the contract and then changed. I even called them to find out the exact date my contract was over.
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- Anonymous Coward, 28 Sep 2007 @ 11:38am
  
  Re: A lookback at Sprint
  1978? Sprint PCS appears to have debuted in 1995...
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- tc1uscg, 4 Oct 2007 @ 3:28am
  
  Re: A lookback at Sprint
  TasMot.. When my contract ran out. My plan didn't go up. When I switch plans, they didn't change my contract. I still didn't have one. Only when I wanted to get a new phone was I told that I would have to sign a 2 year contract to get the max money off, 1 year to get half the money off. I bought the phone out right and stuck with no contract. If people would stop being so blinded by the idea of that new cool 500.00 phone for 199.00, they would just pay the full price and not get a contract. But people expect 110% customer survice while getting everything else for free. Not going to happen. VZ is so sure of itself by not extending contracts, people fail to see they are more expensive and last time I checked the fourums all over, they are as bad if not worse then Sprint or AT&T for customer service. They just by enough advertising to stay out of the lime light of big media. Been there.. had that.. got smart and went back to Sprint. The grass is green on both sides and they both need to be mowed every now and then.
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Meoip, 28 Sep 2007 @ 11:06am

what
I've always been able to do this. Verizon, sprint, ATT / Cingular / back to ATT. They rip you apart cost wise for it but it's always been possible.
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spurioustruth, 28 Sep 2007 @ 11:12am

half the issue...
Agreed that the n-year commitments are terrible for the customer (after all--if the vendors service levels drop off during those two years, I'm going to leave, and I don't want to get penalized for my vendor and their every changing capabilities).

But, In terms of marketing data plans in general (and the coming WiMax in particular) I'd like to suggest not following the playbook of AT&T/Cingular...

They have 38 distinct data plans that mostly vary on the kind of device you are using.. Did you know that your smartphone eats a different kind of data than your Windows Mobile phone does? Your direct connect laptop card? You do now... (to note: some of the features are quite understandable: additional fees for Microsoft direct push, Good services, etc make sense for differentiation but for the data-is-data part of the game it leads to pure confusion).

I believe simplification of the *entire* product menu is in order. AT&T used to have that with the "digital one rate" plans back in the day (albeit without the data part).

Here's hoping the vendors start swinging back that way.
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- Anonymous Coward, 28 Sep 2007 @ 11:58am
  
  Re: half the issue...
  It's not so much the service dropping off. It's more the fact that they don't rev the technology. Who wants to be locked into 2 years of AT&T's EDGE when someone else offers EVDO at the same price?
  
  Being able to take your phone and instantly hop over to someone who provides something BETTER is key to forcing them to keep improving things. Why would AT&T need to move quickly with an affordable WiMax play; they have millions of people locked into EDGE and digital cable.
  
  At some point, this will be moot. Your phone will continuously and instantly negotiate rates with providers on the fly and will seamlessly switch between them. All they'll be is connectors between endpoints. A commodity.
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Archie Andrews, 28 Sep 2007 @ 11:43am

verizon
For anyone on Verizon that may have been late on bills, They use, or have used a crooked New Jersey law office for their collections...
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- RandomThoughts, 28 Sep 2007 @ 5:19pm
  
  Re: verizon
  Archie, why do you say "crooked New Jersey law office"?
  
  Isn't the crooked just assumed? You are being redundant.
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Michael Long, 28 Sep 2007 @ 11:50am

sliding price scale
If they're going to do it on a sliding price scale, then base it on usage. After all, it's only fair that the people who use the system the most pay for that use.

Though such a thing won't make the torrent crowd happy...
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- matt, 28 Sep 2007 @ 12:16pm
  
  Re: sliding price scale
  just a fyi, charging a premium for higher use would lose customers in any business - the reverse of a "volume discount" doesn't exactly create business or cater to customers - its like a big FARK YOU to your face, really.
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  - Michael Long, 28 Sep 2007 @ 3:18pm
    
    Re: Re: sliding price scale
    I can think of plenty of examples like bandwidth, electricity, water, toll roads, etc.., where if I use more I pay more. After all, my utility company doesn't give me a quantity discount on electrons.
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    - tc1uscg, 4 Oct 2007 @ 3:33am
      
      Re: Re: Re: sliding price scale
      Too funny but right. Don't forget, there are those (cable and Verizon) who will boot your behind if you use TOO MUCH of that service while only paying for what they consider unlimited.
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Anonymous Coward, 28 Sep 2007 @ 11:51am

This doesn't directly apply, because we don't have wireless phone service, but I work for good-sized telco (although not a giant one) that offers phone, internet, and digital TV services. All of our services are risk free with no obligation, no contract, no nothing. If somebody wants to get our ultimate internet package on a promotional deal for $20 a month for three months, and then cancel it right before the three months is over, that's perfectly fine. Our goal is not to lock people into our services, but instead convince them that we have the best services to offer, and that if they try us, they will probably like us. I wish that was the mentality throughout the industry, because it really is a win/win situation. Let the product sell itself, not the contracts. If your product or service is good enough, you will be rewarded with sales. If not, it means you have some more work to do.
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Anthony, 28 Sep 2007 @ 12:06pm

SPRINT
That would appear to be the only thing that they do right. Horrible coverage, horrible sound quality, horrible customer service, nothing ever goes right with them. I can't wait to escape thier contract with it expires.
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- Matt, 29 Sep 2007 @ 11:14am
  
  Re: SPRINT
  All of this chatter about contracts and early termination fees are... meaningless. If you're not happy with your service, then it's your God-given right to call your company's customer service line and vent your righteous frustration out to the person on the other end of the line.
  
  THAT IS WHAT THEY ARE THERE FOR.
  
  Complain often enough, and you've completely blown the profit margin that they typically would have made off of you. At that point, you are a liability to the company, and they'll politely ask you to take your business elsewhere. And since they're asking YOU to leave, it costs nothing, and you should be able to port your number with you should you desire to do such a thing.
  
  They're counting on you not complaining. If you don't complain, then nobody is holding them to task for the lousy coverage, poor call quality, and technologies that lags behind most of the industrialized world. Not happy? Call those bastards and LET THEM KNOW.
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  - tc1uscg, 4 Oct 2007 @ 3:35am
    
    Re: Re: SPRINT
    No.. something more simpler and less stress full. Just pay the ETF and go somewhere else with your cheese and wine. I'm sure some other provider would just LOVE to have you.
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MRG, 28 Sep 2007 @ 2:26pm

Maybe it has less to wising up and more to do with
Just a thought but the State of Minnesota just announced this week that they are suing Sprint/Nextel for deceptive practices concerning their cancellation policies. I wonder if dropping the charges may have something to do with the lawsuit. The State of Minnesota is suing because they get the largest number of complaints concerning Sprint/Nextel. Apparently they extend people's contracts without letting the customer know they are doing it.
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Bob Weiss, 29 Sep 2007 @ 6:18am

Sprint Sued by MN AG
Sprint is being sued over this very issue by the Minnesota Attorney General. People who make the slightest changes - like ordering a new battery - are having to extend their contract terms. I think it is interesting that they "now" want to let people choose when and how much of a contract therm they want.

Hmmmmm......anyone?
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Woadan, 29 Sep 2007 @ 9:47am

Sprint
I have to admit that I haven'tooked up the details, but I seem to recall in the past week of hearing about how Sprint was not going to subsidize the cost of the device with the WiMax offering.

If this is true, or at least that is what they are saying, then I think they are misleading. If I sign up for a 3-month plan and buy device A for $100, and my monthly fee is $75 x 3 months, I paid $225 for the service. If I sign up for a 6-month plan and also buy device A for $100, and my monthly fee is $50 x 6 months, I paid $300 for the service.

3 months = $225 + $100 = $325/3 = $108.33 per month svc/dev
6 months = $300 + $100 = $400/6 = $ 66.67 per month svc/dev

All they're doing, if this is how it works (and I don't know for sure that it does), is shifting where the money goes.

I don't doubt for a minute that the difference in monthly fees will be sgnificant if you compare a 3-month term to a 1- or 2-year one.

It's a step in the right direction, perhaps, but what still remains to be seen is whether you have to buy a Sprint-branded device to get on their network. And also whether you can use the device on a competitors WiMax service, too.

I'm all for no lock-in as long as it really is no lock-in. But if the device is still tied to the network/carrier, then all that's being done is shifting the subsidy. And that is really no change at all.

Woadan
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- tc1uscg, 4 Oct 2007 @ 3:43am
  
  Re: Sprint
  Not really. Don't assume device "A" is 100.00 out the door. Lets say it's 300.00 with NO CONTRACT and your monthly wimax plan is 50.00. Now, If I want the same device for FREE but sign a 2 year agreement, I get the plan for 30.00 a month.
  
  300.00 + 50x24=1500.00 no contract
  300.00-300.00 + 30x24=720.00 w/contract
  
  So, would you rather pay double not to have a contract? It's like insurance. Is it fair for a insurance company to consider your policy based on what the vehicle cost new in 1985 but will only pay out book value if it's a total loss? Statefarm does this on motorhomes and I know.. they do it to me.. but they are still cheaper then anyone else. Guess it's a no brainer. For some.
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Woadan, 29 Sep 2007 @ 9:49am

Another thought: How will you pay? Will you pay all of the costs up front? Or will you be charged a monthly fee?

Woadan
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Tanya, 29 Sep 2007 @ 12:27pm

Sprint service & phones
I'm one of the few who are happy with Sprint....BUT I would like to know about this so-called "Iphone" clone they are coming out with in December....anyone....? Information....? email me at Spitfire56@aol.com...thanks a bunch!
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- tc1uscg, 4 Oct 2007 @ 3:46am
  
  Re: Sprint service & phones
  It's the HTC touch. http://www.htctouch.com/
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WMark, 1 Oct 2007 @ 8:58am

new business model
Wireless companies require contracts when they subsidize devices...you want a free phone? Want a Treo for only $199? The carrier has to make that money back, so you're on the hook for two years. Don't want a contract? You can get that today by paying full price for a phone.

What's behind the change to "no contract" business is the removal of subsidies for devices in the Wi-Max space. Fortunately, Wi-Max chips are likely to be pretty inexpensive, so they are cheap to inbed in a wide range of devices. You won't have to pay much of a premium for a Wi-Max device and you'll be able to go "contract free" for the connectivity...but don't forget about the applications...
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Anonymous Coward, 13 Feb 2008 @ 10:16am

what i hate about sprint is the coverage. plans are alright. and also u cant send ringtones to any other phone. this sucks!
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Anonymous Coward, 13 Feb 2008 @ 10:20am

what i hate about sprint is the coverage. plans are alright. and also u cant send ringtones to any other phone. this sucks! sprint phone suck! all the cool phones arrive at all the other phone carriers. they charge too much for early termination!
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mike wesdon, 10 Apr 2008 @ 2:14pm

I posted my at&t family plan on www.adioswireless.com to save $250 in early termination fees. Just found someone to take over my wirless contract.It cost $19.95 but no more plan.
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Brian Hilgefort, 25 Jun 2008 @ 3:14pm

Personal Information
Did anyone know that back when Sprint had their old billing system, that if someone had your information and changed something that there is nothing that they can do about it. After 34 reps and 3 corporate reps and $400 later. I finally get to the new system which is more secure. But after I told each and every rep what happened, they did nothing to prevent anything from happening. So while my account was being bent over a table and taken for a ride. I was finally told it was fixed and I was on the new billing system. Just last month. I get a call and a letter from a collection agency who stated that I owed sprint almost $500. At first it was the ETF. Then they told me that it was the balance on the old account before I was put on the new billing system. Now that I am settled in my new account, my credit is ruined, my ETF was reset, and I don't have $600 + the "ETF" that's in collections + my current bill to cancel and go with another company. Anyone have any suggestions? PLEASE email me. I used to love them. Now I despise them for taking advantage of the people who don't complain. Looking for help. I may be persuing legal action! You never know!
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Sprint NEXTEL View discussion website, 26 Jun 2008 @ 2:02pm

Sprint NEXTEL View discussion website
Sprint NEXTEL View discussion website
www.ztwirelessview.com
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Class Action Lawsuit authorized dealer, 30 Oct 2008 @ 11:59am

Class Action Lawsuit authorized dealer
Class Action Lawsuit For authorized dealer

http://www.nextel.bz
Ever since Sprint acquired Nextel in 2005, the company has become the poster child for poor customer service. It has repeatedly received the worst marks of all five major U.S. mobile operators in a semi-annual customer care survey by J.D. Power & Associates, and has been bleeding subscribers by the millions for the past few quarters. Sprint’s (S) new management has said that fixing its customer service problem I am not surprised at Sprint's lack of customer service. The never cease to amaze me on how completely arrogant they are. I had an issue with them about a year ago that resulted in a long-standing disagreement with them that they continually put their head in the sand over.
When the new CEO came in recently, I sent him an email, just to give him a real-life example of how his firm turns away customers. Of course, I never heard back from him. In my opion, Sprint is a very poorly managed company
I now feel as it is time for Sprint-Nextel to take time and recognize all the hard work, and investment I have put Class Action Lawsuit For Dealer http://www.nextel.bz Interested persons
You may be visiting this website because you know something about one of our
open cases or about a potential new case. You may be a current or former
employee of a defendant or you may have claims like those of the plaintiffs
in those cases. You should eMail sprintactionlawsuit@gmail.com if you want to share what you know or what
you have experienced with us. This kind of information can be very helpful
in prosecuting a case and identifying those who have been harmed. If you
have a potential claim, we treat all such inquiries as privileged and
confidential.

Lawsuit to Recover Commissions for Sprint Nextel's authorized deale
http://www.ztwirelessview.com/index.htm I now feel as it is time for Sprint-Nextel to take time and recognize all the hard work, and investment I have put
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Class Action Lawsuit for Authorized Dealers Agains, 1 Nov 2008 @ 9:35pm

Class Action Lawsuit for Authorized Dealers Against Sprint/Nextel
Class Action Lawsuit for Authorized Dealers Against Sprint/Nextel

I am one of the most well-known wireless leaders in Northern California providing wireless solutions for corporate accounts. The difference between my company and everyone else is my exceptional vision and leadership especially on the B2B side. Without sacrificing quality, integrity, and customer service, my abilities have gained me the knowledge and expertise to win numerous awards including top seller award for Northern California from a variety of wireless carriers. Having said that, I was approached by Nextel in 2002 to become one of their B2B Authorized Representatives as a result of my success from previous years. With my exceeding success through the B2B channel, Nextel approached me to do a joint venture on launching new retail locations in the Northern California market since there was no strong retail presence. With knowledge, experience, and expertise I put together one of the most dynamic teams of highly motivated and well qualified communication consultants. In 2003, my ex-colleague and dear friend was invited to join in this new vision. I launched eight locations in Northern California and I was invited to launch new locations in Arizona, Colorado, and Minnesota. In 2005, when the merger with Sprint occurred, the new management team: Mark Sadighian, Paul Harris, and Dennis McSweeney no longer shared the vision that Nextel had with my company. At the same time I found out that my partner was embezzling money and started a new wireless company with another carrier. When I approached Mark Sadighian with my new found news, the advise that I received was to separate our partnership and for me to start a new company under a new name. I was granted an exclusive dealer contract with Sprint/Nextel and their service center. Two months into my new company, I submitted six new retail locations that were denied to me for expansion, but at the same time were handed to someone else. Sprint/Nextel set me up for failure, after I invested hundred of thousands of dollars into the new company. Sprint/Nextel decided at that point not to support me in my visions, ideas, and ventures. As a result, I am seeking other dealers that have had a similar experience as me for a class action lawsuit. Before I posted my story online, I requested the immediate assistance from the CEO of Sprint, Daniel Hesse. He never responded to any of my emails, and at this point left me with no choice, but to put together a class action lawsuit for Authorized Dealers. I will not stop until my losses are compensated. If you are interested in contacting me with any questions, concerns, or to assist me in participating in this class action lawsuit please email me at: sprintactionlawsuit@gmail.com or visit www.nextel.bz
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- dice tiss, 3 Jun 2009 @ 6:16pm
  
  Re: Class Action Lawsuit for Authorized Dealers Against Sprint/Nextel
  I am sorry for your losses, but you were doomed from the beginning with the sprint/nextel merger. Sprint has been losing money for sometime now and they will do anything to take the money of honest working people. Trust me I have been dumb enough to deal with them for 2 years now, but after this contract ends im going with another carrier.
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mmjm6300, 22 Feb 2010 @ 6:47am

I hate Sprint
I absoulutely hate them! Just got a bill and they charges me $200 early termination fee. I was told that 1 of the 6 phones I had with them would have a contract that was up in August of 2009, now I am told it is June of 2010. My husband and I have numbers that are one off each other, how do I know that they didn't make the mistake and tell me the wrong time,instead I was told it was my fault. Then I tried to explain to them, why would I move 1 phone to another company that still had a contract and leave 2 with Sprint. That does not make sense to me, why would I incur that $200 charge, if I knew the contract would be up in June. The point is I WOULDN'T!!!!! I was told it happens all the time. YOu would think they would tell you that the phone still had a contract on it but no they don't do that either. I verified a couple of times when I would have to call Customer Service.
They would constantly screw up on our bill $5000 text messaging charges when we had unlimited texting. Screwing up packages on the phones, it was always something and it just kept getting worse. If people do cancel their service and go to a different company and incur that $200 charge maybe because it is for the same reasons or ones like it.
If you decide to go to Sprint, DON'T!!! It is not worth it, if I have to pay that $200 it will be a $1 a month.
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