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Friday, June 22, 2007, 09:00 am

AT&T to impose $175 early iPhone cancelation fee

By AppleInsider Staff

AT&T has spent $50 million to beef up its relatively slow wireless network in anticipation of next week's well-hyped iPhone debut, but any customer who isn't wowed by the new gadget will find it costly to cancel the service, reports Boston.com.

Though it has become customary for wireless providers to charge customers who breach their contracts, the measure is usually applied to help providers recoup handset subsidies offered to customers when they first agree to a new two-year agreement.

Even though Apple's $499 and $599 iPhones are not subsidized items, AT&T still plans to charge a $175 termination fee for users who want to break their two-year contracts.

The early termination fee is "a little odd," said Michael Gartenberg, vice president of JupiterResearch in New York. At the same time, however, the analyst doesn't believe it will be an issue for most consumers.

Gartenberg added that AT&T's termination fee is likely a bid to boost its revenues by raising the bar for cancellation and hanging onto these affluent customers as long as possible.

AT&T has not yet said how it will handle, or what it plans to charge, customers under existing contracts who want to upgrade to iPhone early.
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