Google Defends Nexus One Termination Fee

Google’s Nexus One smartphone has been well received, but complaints about the search giant’s lack of retailing savvy are starting to pile up.

The latest that has bloggers clamoring: double termination fees levied by both Google and T-Mobile that can add up to a whopping $550 for customers who cancel their contract.

Even for the wireless business, that’s a large number (not to mention, more than it costs to buy an unlocked Nexus One). T-Mobile charges Nexus One customers $200 for canceling at any time in the first eighteen months of their 2-year contract.

The rub is that on top of T-Mobile’s fees, Google charges its own $350 “Equipment Recovery Fee” for Nexus One buyers who cancel their contracts in the first 120 days. That means anyone who buys the phone online with a T-Mobile contract and wants to get out within 3 months are going to have to fork over a hefty total of $550 (excepting a 14 day risk-free trial period).

In comparison, Verizon Wireless levies a prorated $350 fee- the highest in the industry- for canceling on its contracts.

A Google spokeswoman said in a statement that the Equipment Rental Fee is a way for the company to recoup the subsidy it gives to contract customers. “This is standard practice for third-party resellers of T-Mobile and other operators,” she said. A T-Mobile spokesman said that the carrier’s early termination fee is standard for its customers on contract.

This latest criticism comes on the heels of other bad news that has cropped up since the Nexus One went on sale exactly a week ago. Some customers have complained that the phone doesn’t stay connected to T-Mobile’s 3G data network and reverts instead to an older network that can make surfing the Web or watching videos on the phone excruciatingly slow.

Another target has been customer service. Google, which handles all the questions on the phone, only offers e-mail support and can take several days to respond. In response yesterday, Google said that HTC Corp.- the makers of the phone- will start providing telephone support.

source