Google slashes ERF fee for Nexus One

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Those buying a subsidized Nexus One from Google face two fees should they decide to terminate their contract with T-Mobile. The first fee is T-Mobile’s ETF, or early termination fee which is pro-rated, but could be as high as $200. The second is Google’s ERF, or equipment recovery fee which was set at $350 when the Nexus One was launched. That made the grand total up to $550 should a customer cancel their contract early. That reality more than likely scared off more than one potential buyer of the Nexus One.

Both ETF’s and ERF’s are typically charged for subsidized phones to ensure the cost is redeemed through the subscriber’s guaranteed service which has become traditionally two years. The good news is that Google has now slashed their ERF fee by more than half and pro-rated it based on how much you paid for your phone. New T-Mobile subscribers who paid $179 for their Nexus One will now have a $150 ERF while current subscribers who have paid the $279 upgrade price will only be charged $50.

This move along with the decision to open a phone support line for the Nexus One are clear attempts by Google to attract more buyers of the Nexus One. Google has a lot invested in their new business model of delivering smartphones directly to subscribers. Some were already skeptical of Google’s attempt and so far many customers have not been impressed.