Wednesday, June 2, 2010

AT&T Making Changes

AT&T Making ChangesAT&T is making some changes and it probably has something to do with Apple's impending announcement of the iPhone 4G, which is expected to come any day now. In addition to adding Wi-Fi to a struggling 3G network, the company has announced that it is increasing early termination fees from smartphone and netbook-using customers.

As of yesterday, early termination fees that were once $175 will grow to a whopping $325. The company sent an open letter to its customers last week about the fee increase. On the other hand, if you have a phone that is not a smartphone, your fees will drop from $175 to $150. If you are within an existing service agreement, the fees will not apply to you, but they will apply to new and renewed contracts.

With the new early termination plan, for every month a customer stay with AT&T, their fee will be lowered by around $10 each month (that's for smartphones and "high-end devices). The fees for basic phones will drop about $4 each month.

Despite what seems like an extreme increase in fees, AT&T's fees are still lower than Verizon's, which can run $350 on a Droid and other Smartphones. And the price of the iPhone is dropping. As a matter of fact, at Wal-Mart, you can purchase a 16GB iPhone 3GS for just $97.

Even so, AT&T will probably not be winning any new fans with the price increase. The network is already the target of thousands of complaints about dropped calls and other wireless data issues. In an effort to make some improvements, just last week, AT&T began attempts to support its 3G wireless service in New York City. The company added a free Wi-Fi hotspot to Times Square. If all goes well, you can probably expect more free Wi-Fi hotspots in cities around the world.

According to Wall Street analyst, Drake Johnstone, AT&T could lose about 40% of its iPhone customers when Apple releases the iPhone for Verizon networks, but will the increase in fees and attempts at increase in service make a difference or affect iPhone owners' migration to Verizon? Johnstone says they might, but no one can say for sure until actually happens.

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