Also, though the termination penalty is a reflection of the subsidy on the initial hardware purchase.
Yes, it makes the user adhere to the term of the contract, but I believe that the hardware price is usually increased by about the amount of the early termination penalty. The big bad cell companies are willing to subsidize the price of the hardware in exchange for the promise of revenue from the contract for a period of time. Usually, the longer the contract the greater the subsidy. Cheers, Don -----Original Message----- From: [email protected] [mailto:[EMAIL PROTECTED] On Behalf Of Levi Wallach Sent: Thursday, July 12, 2007 9:50 AM To: [email protected] Subject: RE: [Treo] Article: Watchdog wants tough message sent to Sprint Yeah, it did go to the full story, although initially I had problems loading it. Somehow I doubt Sprint will pay these customers $200 for ending the contract. Look at it from their point of view. The $200 that customers have to pay is so that they won't leave Sprint. Sprint knows that a) it would be a bad thing for people to leave them in a business sense, and b) that perhaps there service is not particularly good and so this is a definite risk. So they put this additional burden on their customers for leaving. Is it fair to us? No way! But that's their thinking. But in this case, they view these particular customers as a liability. Let's forget about whether these customers are really nuisances or they are honestly just trying to resolve an issue that Sprint is at fault for in the first place. In any case, in Sprint's eyes dropping these accounts will actually save them money. However, having to actually pay these people an additional $200, or shell out $200K+ in all, would be a big immediate loss in revenue. Certainly nothing catastrophic for such a big company, but still. Also remember that they did in a sense pay some of these people for leaving, since the "zeroed out" their bills. Those bills were probably almost all for less than $200, but still, they probably took a loss on that. Having to take another $200/customer is not likely. I'm guessing (although not certain of course), that Sprint weighed the cost savings of terminating these contracts with the potential for bad pr that the move might cause. It seems like the press so far has been mixed. The customers for the most part got a good deal, I think. Obviously they were not very happy with Sprint if they were calling that much (whoever's fault that was), and so they got to leave without paying a penalty, in some cases got real charges erased, and are now free to go to any other carrier and take their phone number with them. The only bad part of this for customers is if they spent much on a phone. In that case, they have to buy a new one. They could sell their current phone to pay, but it probably would not make up the whole cost. So in this sense there is a real financial cost to it. I think due to this, the most equitable thing for Sprint to do is to take their phone (if the customer agrees) and refund the money they paid for it... Levi Levi Wallach Blog: twelveblackcodemonkeys.com <http://twelveblackcodemonkeys.blog-city.com/> DVD Review Site: dvdmon.com <http://www.dvdmon.com/> Pictures at: http://wallachexpressions.smugmug.com/Levi <http://wallachexpressions.smugmug.com/Levi> ________________________________ From: [email protected] on behalf of Bill Motzing Sent: Thu 7/12/07 11:05 AM To: [email protected] Subject: Re: [Treo] Article: Watchdog wants tough message sent to Sprint Looks like I was being too lenient asking Sprint only to give customers the option to finish their contracts. That link does not go to the full story. Was anyone able to find it? ----------------------- Sent with ChatterEmail+ True push email for the Treo Smartphone http://get.chatteremail.com <http://get.chatteremail.com/> Yahoo! Groups Links [Non-text portions of this message have been removed] Yahoo! Groups Links
