Google’s Nexus One – Beware Problems and HUGE Termination Fees

Posted by Benny on Jan 13th, 2010 | no comments home title

Google entered the mobile world with the introduction of their open-source operating system dubbed Android a little over a year ago. Several phone manufacturers have jumped onboard and decided that concentrating their R&D dollars on hardware development rather than the OS shows real promise for companies like Samsung, HTC, Motorola to name a few.

Recently, Google itself rolled out the Nexus One (a carrier agnostic phone) which looks to be a strong competitor in the smartphone race. In monitoring early customer support issues, the Google Help Forums have been “lit up” with several complaints and a plethora of issues. Everything from order problems to dropping calls.

Of special note is the cancellation penalty. According to Google’s terms of service, they make it clear that “you agree to pay Google an equipment subsidy recovery fee (the ‘Equipment Recovery Fee’) equal to the difference between the full price of the Nexus handheld device without service plan and the price you paid for the Nexus handheld device if you cancel your wireless plan prior to 120 days of continuous wireless service.”

Essentially, the Equipment Recovery Fee will run customers in the United States $350 who opt to choose T-Mobile’s subsidized plan. Google will charge it to the credit card used during the device purchase. So to clarify, your lower cost to purchase the Nexus One is subsidized by T-Mobile, because they look to recover their costs over a two-year commitment you are penalized for breaking that contract, nothing unusual here, but the fees are getting higher.

Here is where it gets a bit interesting. Google further specifies “the Equipment Recovery Fee is imposed by Google and not your chosen carrier and is in addition to any early termination fees that may be charged by your chosen carrier in connection with termination of your wireless plan prior to fulfillment of your chosen carrier’s service agreement term.” It also stresses that this fee is not a “penalty.”, semantics Google, we’ll call it a penalty here.

Take a look again at T-Mobile’s terms and conditions and you’ll clearly see that you’ll be paying a hefty second fee if you cancel within those first four months.

THE EARLY TERMINATION FEE IS: $200 IF YOU TERMINATE WITH MORE THAN 180 DAYS REMAINING ON YOUR TERM; $100 IF YOU TERMINATE WITH 91 TO 180 DAYS REMAINING ON YOUR TERM; $50 IF YOU TERMINATE WITH 31 TO 91 DAYS REMAINING ON YOUR TERM; AND THE LESSER OF $50 OR YOUR MONTHLY RECURRING CHARGES (including any applicable taxes and fees) IF YOU TERMINATE IN THE LAST 30 DAYS OF YOUR TERM. The Early Termination Fee is part of our rates and is not a penalty.

Here is the bottom line if you decide to opt for T-Mobile’s subsidized plan:

1. Canceling the contract in the first four months leads to $550 in charges (this is IN ADDITION to the $179 you already paid for the phone)

2. After four months, only the T-Mobile fee applies

According to Ars Technica who did a little investigation “Paying fees to Google and to T-Mobile, fees that far exceed the device subsidy, seems rather odd, so we checked in with Google for comment. A spokesperson tells Ars that recouping the full subsidy is ‘standard practice for third-party resellers of T-Mobile and other operators, and you will find similar policies for other mobile service resellers.’ As for T-Mobile’s decision to levy another $200 on top of the subsidy, we would have to consult them. (Which we did; we received no response.)”

Beware if you’re looking at this phone or ANY phone, there are some big problems and issues with newer phones nowaday, cancellation fees are getting higher so don’t walk into your contracts blindly, it pays to read the fine print.

Google’s Nexus One – Beware Problems and HUGE Termination Fees

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