T-Mobile to Cover Your Early-Termination Fee

8:32 PM, Jan 8, 2014   |    comments
(Peter Macdiarmid/Getty Images)
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Edward C. Baig, USA TODAY

LAS VEGAS - At last year's Consumer Electronics Show, T-Mobile's then relatively unknown CEO John Legere took potshots at AT&T saying the rival carrier's coverage was "crap."

A year later, Legere is no less outspoken but now a much better-known maverick, even more so since Monday night, when AT&T kicked him out of a CES party it was having with rapper Macklemore.

T-Mobile all these months has taken a number of steps to help disrupt the wireless industry. It did away with ironclad wireless contracts and overages. It relaxed upgrade policies and made international roaming free. It added the iPhone to its product lineup, along with tablets.

On Wednesday, Legere announced the latest path in its self-proclaimed "Un-carrier" strategy to eliminate industry pain points. T-Mobile will pay early-termination fees if you switch to its network from AT&T, Sprint or Verizon, giving consumers what Legere quips is a "Get Out of Jail Free" feature. "
T-Mobile will pay you $650 per line for up to five lines, which includes the price it will give you as part of an eligible trade-in on your soon-to-be-discarded device. T-Mobile insists this not a short-term promotion, but rather the permanent end of contracts.

How does it work? You trade in your current phone for instant credit (up to $300). Then, provided you are eligible, you can get a new device with no money down, no matter which handset you choose from T-Mobile's portfolio. You'll pay for whatever new phone you buy with 24 equal monthly payments. You might even make a bit of money if you trade in a recently purchased phone under a subsidized plan with your old carrier, since the trade-in value might be higher.

Meantime, you must mail (or upload) the final bill from your old carrier to T-Mobile, verifying the phone numbers you have ported over, and the early-termination fee that your "ex" is charging.

T-Mobile cited research that states that to date, 40% of families have been reluctant to switch carriers because of the hefty termination fees. Once that's been verified, T-Mobile will issue you a MasterCard debit card, up to $350 per device. In an amusing footnote, T-Mobile will even prepare a "breakup" letter you can share with your ex-carrier.

Of course, T-Mobile still must give potential customers reasons to switch. T-Mobile's nationwide 4G LTE network now reaches 209 million people in 273 metro areas, and claims that based on real-time speed tests, it is now the fastest in the country. T-Mobile added 4.4 million customers in 2013, a number that could climb with the elimination of early-termination fees.

T-Mobile also added more spectrum recently, and is now beginning to launch its even faster Wideband LTE service (20+20 MHz LTE), starting in Dallas.

"What we have now is a no-apologies network," Legere says.

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