AT&T Ups Smartphone Early Termination Fees

[drutort]

well how about if i dont buy any phone from the company they dont have the termination fees? isnt that fair? i pay for the service not there shitty overpriced cheap phones, most people are pretty capable to get a basic phone any place they wish so IMO i dont see it being fair at all if you come in from one network and go to other and have to shell out 150-250 for termination of a contract

tell me what profits they lose when you dont buy any phone from the company?

 

[Montezuma]

[citation][nom]totheshed[/nom]True but they would have to spend 5+ billion. Money they definitely do not have.[/citation]

AT&T made $12.535 billion in profit in 2009. Not revenue, but PROFIT. I guess you suck at math too, because $5 billion USD is far less than $12.535 billion USD. AT&T only excuse is that they believe all of their customers and investors are complete and utter morons.

 

[WyomingKnott]

To beat a dead horse:
The phone company sells the phone at a highly subsidized price to get your business and the monthly revenue. From a business point of view, it's reasonable to penalize you for not giving them the expected revenue stream.
For example: I get a $500 (retail) phone for $50. If I were to walk away from the phone company, they would lose money. Not $450, but real money.
For example, and this is an actual story: I walk into the Nokia store and purchase an unlocked smartphone for $350. I put my ATT SIM card in it, and I have a smartphone on ATT, with no early-termination issues. I paid for what I got.
Early-termination fees are indeed annoying, but they are only punitive to those who a) did not understand what they were agreeing to, or b) have a sense that they are entitled to a free lunch.