AT&T Raises Early Termination Fee to Deter iPhone Users from Switching to Verizon?

The Wall Street Journal is reporting that AT&T Wireless plans to raise the early termination fee for smartphone contracts from $175 to $325 starting June 1, 2010. The change will apply only to new contracts signed after that date. Via WSJ:

AT&T Inc. (T) plans to raise the fee it charges customers trying to get out of their smartphone wireless contracts early, a move that comes amid expectations that the carrier will lose exclusivity on the iPhone over the next year.

The Dallas telecommunications provider will raise its early termination fees to $325 from $175 on contracts signed for smartphones, as well as cellular-connected netbooks.

The change could be interpreted as a preemptive move by AT&T to deter iPhone customers from switching to Verizon once the device becomes available on that network. A recent flurry of rumors indicates that a Verizon iPhone could arrive as early as this fall.

The cost for Verizon switchers who buy a 4G iPhone on AT&T this summer may be more than just the $325 early termination fee. They will also likely have to purchase an entirely new 4G iPhone. The Wall Street Journal and others have reported that Verizon will get its own separate model of iPhone for their CDMA network (AT&T has a GSM network).

It may not be what Apple wants you to do, but if you’re interested in buying a 4G iPhone this summer but rather have it on Verizon, it may be best to wait a until the fall.

*Update* A reader notes that Verizon increased their early termination fee to $350 in the winter, which may indicate AT&T’s increase is just keeping pace and not further evidence of a Verizon iPhone.


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