Early Termination Fees and Other Carrier-Based Charges
We identified three types of wireless fees that can be lowered or avoided by choosing the right carrier (although some, such as the notorious early termination fee, are more pervasive than others), by changing phone usage practices (e.g., using less data, especially when outside the carrier's coverage area), or by closely monitoring your wireless bill. The first group of fees varies based on your carrier of choice, and these include activation, phone upgrade, and early termination fees, as well as charges for late payment and adding another line to a family plan (see chart).
Activation Fee.This one-time charge for opening a new line falls in the mid-$30 range at Verizon Wireless, AT&T, and Sprint. Only T-Mobile holds back, although it does charge $10 for a SIM card starter kit for new customers who don't already have a SIM card. One new Verizon Wireless customer writes on a company discussion board of defecting from Sprint after being hit with an activation fee, not realizing that Verizon Wireless demands the same toll. In reply, another Verizon Wireless user points out that activation fees are standard practice but says they are often waived during promotions by carriers or by third-party suppliers (such as Radio Shack and Best Buy), and sometimes even by customer service representatives who are eager to win consumer allegiance.
Phone Upgrade Fee.This fee causes great umbrage among customers who regard it as just another money grab by providers. Phone upgrade fees range from zero at T-Mobile to $30 at Verizon Wireless and $36 at Sprint and AT&T. This fee, atop the price paid for the new phone, prompts many threats (often realized) to switch carriers. One Sprint customer took a stand when told the phone upgrade fee would be waived but then wasn't and a lengthy follow-up chat with customer service netted only a 50 percent reduction. He posted his conversation in the company's online forum and then switched to a budget carrier that doesn't charge as many fees. As with the activation fee, forum posts reveal that polite persistence sometimes pays off with a fee waiver or discount.
Early Termination Fee.Consumers fed up with fees imposed by their current provider and considering a switch should stop and count to ten. Canceling a service contract invariably triggers the dreaded early termination fee (ETF). This fee varies by carrier and also depends on the type of device. The starting ETF for smartphones (and other "advanced" devices) exceeds $300 with Verizon Wireless, AT&T, and Sprint and slowly drops as the original contract expiration date nears; the T-Mobile ETF starts at $200, but all new T-Mobile contracts are month to month, which means no ETF to fret over. This fee is notoriously difficult to avoid because it facilitates customer retention.
That said, a contract breach flaps both ways. When AT&T added an administrative fee in May 2013, some people claim to have ended their contracts prematurely without paying the early termination fee. Most customers have no such luck with AT&T, although other posts indicate that some have secured a credit and some have entered into arbitration to void their contracts. Similar scenarios have played out with the other carriers as well.