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Verizon Wireless Cuts Early Termination Fee

July 3, 2006

Verizon Wireless • Rates • Coverage • Contracts • "Perpetual" Contracts • Billing Disputes • Other Verizon Services --- News • Verizon Wireless Opens Network to All Devices, Software • Verizon Agrees to Stop 'Unlimited' Claims • Verizon Wireless Changes Contract Policy • Verizon Wireless Raises Text Message Rate • Verizon Limits Its "Unlimited" Wireless Broadband Service • Verizon Wireless Cuts Early Termination Fee

Verizon Wireless says it is lightening up on the termination charges it slaps on customers who cancel their contracts early.

Starting this fall, customers who cancel early will pay a pro rate cancellation penalty based on how many months remain on their contract instead of a fixed fee of several hundred dollars.

Verizon Wireless is the first major U.S. carrier to commit to a national policy of pro rating early termination fees. The change will take effect this fall for new customers. Existing customers will have to -- you guessed it -- renew their agreement to take advantage of the change.

Denny Strigl, president and chief executive officer of Verizon Wireless said the change is being made to adapt policies to customers' needs.

"We believe dissatisfaction with flat early termination fees is tarnishing the entire industry," he said.

Speaking at an industry conference, Strigl said the wireless industry has the ability to transform itself in the years ahead by continuing to add value for customers through technology and responsiveness.

He said Verizon Wireless has the most loyal customer base, as well as the highest ratio of local number portability (LNP) port-ins. Strigl said Verizon Wireless has a track record of listening to its customers and making policy decisions based on customer needs.

Verizon Wireless parted with the industry by refusing to participate in a wireless directory when customers said they didn't want one. The company also broke from other wireless companies to support local number portability because customers wanted the freedom to take their numbers with them if they switched service providers.

Strigl said Verizon Wireless is taking similar action with early termination fees, as it is an issue that increasingly is irking customers industry-wide.

Verizon Builds Market Share

Meanwhile, analysts at Merrill Lynch say Verizon Wireless continues to take market share across the board. Cingular is executing well. Alltel appears to have gained momentum. However, the analysts said T-Mobile is likely to come up short on net additions during the quarter.

Merrill Lynch found that Verizon still has an edge with regard to customer perception of network quality, and it is using that advantage to gain market share.

Verizon stores are extremely busy, particularly in markets where a competitor's service is not up to par. Indeed, so busy are the stores, that it was commented that a number of stores the analysts visited could use additional sales reps in order to help meet the customer demand.

The analysts report that Sprint continues to struggle with its marketing message and many customers and some sales reps still do not understand the supposed benefits of the Sprint-Nextel merger.

Cingular's record has improved, the analysts said. There are still some areas where customers remain unhappy with Cingular's network coverage, but in general customers are seeing an improvement.

T-Mobile USA moved primarily to 2-year contracts in April, becoming the last national carrier to switch to two-year service plans.

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