Shocker — People Don't Like Cell Contract Termination Fees

A new survey says half of American mobile subscribers would consider switching to a new carrier if they didn’t have to pay an early termination fee. More than a third said they’d considered switching, but decided against it becuase they didn’t want to pay the fees, which tend to run from $150 to $250. The operators’ trade body is trying to get the FCC to rule that the fees are part of the rate they charge subscribers, rather than a separate fee, so states couldn’t regulate the charges. A group of House members are asking the FCC to reject the petition, saying it undermines the intended benefits of number portability, which remains popular while churn has stayed low, leading some to wonder whether it’s a sign of a mature market or the effect of long-term contracts with high ETFs. In any case, prepaid service still fails to grab a lot of users in the US, when these numbers would indicate it’s something people would be interested in. That’s probably partly because people like new, cheap, nice handsets too — something that carriers will be loath to offer without long-term contracts. But it also highlights the potential in the market for the discount MVNOs that have had so much success in Europe.

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