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Customers Unhappy with Nexus One Will Face Reduced Cancellation Fees

February 09, 2010

Is it just too costly to try out the new Nexus One phone if you can’t make up your mind in 14 days? Google did attempt to reduce the economic risk by lowering its cancelation fee by $200.

Now, customers who break a standard two-year contract for its phone on the T-Mobile USA Inc. network will only pay $150 instead of $350. The only problem is they will still have to pay a termination fee of $200 to T-Mobile.
As reported by the Associated Press, this lower equipment recovery fee took effect on January 4 of 2010 and applies to customers who break the contract after the 14-day trial period, but before 120 days. Those who break the contract after 120 days will have no fee.

In addition to this fee change, Google also lowered the equipment recovery fee for existing T-Mobile customers who opt to upgrade to the Nexus One from another handset and then break their contract. This fee dropped from $250 to $50.

For those who sign up for a two-year plan with T-Mobile, the cost of the Nexus One is $179. The cost jumps to $529 for those who purchase an unlocked phone that can be used on any GSM wireless network – including T-Mobile’s.

Industry experts speculate the decision to lower the fees has much to do with the Federal Communications Commission, or “FCC,” inquiry into early termination fees across the wireless industry.
The agency last month sent letters to AT&T, Verizon, Sprint Nextel, T-Mobile and Google seeking information about their approaches to early termination fees. The organization wanted to know the size of the fees and their reason for imposing them on customers.

The FCC also wanted to know whether carriers prorate such fees is a cancellation comes closer to the end of a contract and whether they offer trial periods that allow new customers to cancel services without incurring a fee. When addressing communications to Google, the organization wanted to know why customers would be hit twice.

According to T-Mobile, the decision to lower the equipment recovery fee was unrelated to the FCC inquiry and attributed the move to an ongoing effort that began before the agency launched its investigation.

“We have been looking for ways to improve our customers' experience, so we were able to work with T-Mobile to find a better solution for our customers,” Google officials said in a statement.

Perhaps this reduction in fee has something to do with the dismal response to the latest launch by Google. ContactCenterSolutions’s Doug Mahoney had less than positive things to say about the device as a result of cost and the fact Google did not actually manufacture the phone.

Google could enjoy a wider customer base simply due to the fact that Wal-Mart is set to offer the Nexus One. While a connection to Wal-Mart should be a good thing, there are some obstacles Google will have to overcome to make this pairing a success. 

Susan J. Campbell is a contributing editor for ContactCenterSolutions and has also written for To read more of Susan’s articles, please visit her columnist page.

Edited by Kelly McGuire