Mobile operators subsidize the price of mobile phones, so it's no wonder they want to make sure their customers stick around for a while to make up the lost money (and some profit) on subscription fees. However, over time they've extended the length of the contracts from one year to two, and increased the "early termination fees" to ridiculous levels. Those ETFs can be hundreds of dollars and they're impossible to get out of. Even dying won't get you out of the fees sometimes. While it may keep subscribers through the end of their two year contract, it also pisses off enough people that it simply delays the time frame until they switch to a competitor. It appears that Verizon Wireless has finally realized that people aren't thrilled about this. They're still keeping the early termination fee, but prorating it, so that the closer you are to the end of your contract, the cheaper it is to leave. That seems a lot more fair. The company also has decided that existing customers can get the same deals on new phones that new customers can -- which is something that never made sense. Churn is incredibly costly for the mobile operators. Keeping existing customers happy should be a priority -- yet, plans that gave better deals to new customers than existing ones simply served to piss off long standing customers (not that they could leave due to the high ETFs, of course). So, perhaps, lowering the ETF penalty, while also giving customers more reasons to stay, it will help reduce churn even more.
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