Ending Nexus One contract pricier than buying unlocked

By on January 12, 2010, 2:33 PM
If you plan to buy Google's Nexus One smartphone, here's some food for thought: cancelling a Nexus One contract is more expensive than just buying the phone unlocked. Phandroid and others have discovered the phone's Terms of Sale states that cancelling your account not only incurs a carrier Early Termination Fee (ETF) -- which is standard -- but Google will charge you an additional "Equipment Recovery Fee."

On top of T-Mobile's $200 ETF, you'll have to pay Google the full price of the Nexus One, minus the service plan and the price you paid for the device. For example, if you paid $180 for the Nexus One through T-Mobile, you'd have to pay Google $350 for a total of $530, or the cost of the handset unlocked. Again, that's in addition to T-Mobile's fees.

The catch is that it only applies if you end your service within the first 120 days of the contract, but it's still worth considering if you're eyeing Google's "super phone".

User Comments: 7

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Vrmithrax Vrmithrax, TechSpot Paladin, said:

It's only pricier because T-Mobile is taking a $200 bite out of customers who bail on them. This story is all over the net, with people ranting about Google being "evil" because of it, but this is not an uncommon practice for direct sellers of unlocked phones - it's just been brought out into the open with this high-profile phone, making Google look like the originator of the idea and all-around bad guy. The subsidy agreement that Google sells to T-Mobile under gives the phone to them for less than cost, with the remainder paid back after the customer has stayed with the provider for x days (120 probably). If the customer drops out before that, the phone (if it comes back) goes back to inventory as used, can't legally be sold as new, and has to be refurbed or just trashed by Google.

If this wasn't in place, it would be easy for scammers to pop in, get the Nexus for $180, then break the T-Mobile contract for $200, and the scammer then skips away to ebay with a $380 Nexus they can resell for a big profit. T-Mobile gets their pound of flesh, but Google is left holding the bag for a loss. So, Google is just watching out for their own business interests.

Burty117 Burty117, TechSpot Chancellor, said:

Your posts are amazing! once I totally agree, I too have seen this report, even on the BBC news website and its a little unfair on people attack google like they are. As I think you once said, don't get into a contract!

slh28 slh28, TechSpot Paladin, said:

What's the big deal? If you enter into an 18 month contract, you are contractually obliged to stay with the carrier for 18 months! Any get out clauses are just a bonus. If you don't want a contract just get it sim free...

Anyway isn't this the case for all phones, not just the Nexus?

Guest said:

Hay we are only talking 4 months here guys.

It seams to be a device to keep people from simply buying a phone on contract then breaking that contract in a few days and getting a Google phone for just $380 (the $180 plus $200 T-Mobile fee for breaking the contract)

if there was no ETF from Google they would never get there money out of the phones.

This is as silly as the people who are complaining about Google advertising on there own search page.

Vrmithrax Vrmithrax, TechSpot Paladin, said:

slh28 said:

Anyway isn't this the case for all phones, not just the Nexus?

It's typically present for any phone that is also sold in an "unlocked" version besides the contractually locked version. The problem is, in the US most wireless customers buy phones that are locked into a specific service provider, at huge subsidies, so the ETF that most folks are used to experiencing is only with the wireless provider themselves. Up until recently, actually confronting a hardware manufacturer ETF has been fairly rare here, statistically speaking. It's there in the fine print on contracts in several big networks (typically smartphone contracts), but interestingly enough there has never been a big stink raised over it until Google's foray into the market.

derbyjozef said:

Hey does anybody use this one?Well I purchase that just before few days,Simply awesome phone.All latest features.Well All of those functionality and software are work so nicely with android..Please share your thoughts for it.Thank you so much in advance for your support and suggestions...

jobeard jobeard, TS Ambassador, said:

Salt on the injury; In Europe, all phones are unlock -- in fact -- don't support locking!

U.S. domestic service is a manopoly and contrary to the Sherman Antitrust Act !!

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