Reduced exit fees for cable, phone, Internet go into effect

Subscribers will now be able to switch more easily between service providers but will be required to pay off equipment purchases.

iPhone 4 311 R (photo credit: REUTERS/Truth Leem)
iPhone 4 311 R
(photo credit: REUTERS/Truth Leem)
Cable, Internet and mobile phone subscribers will now be able to switch more easily between service providers, after the enforced reduction of exit fees comes into effect on Tuesday.
Under the regulation, which was approved in May, communications companies will be prohibited from collecting an exit fee of more than 8 percent of the average monthly bill multiplied by the number of months remaining in a customer contract.
However, customers will still be required to pay off equipment purchases, such as mobile phones, even after exiting the contract.
This regulation applies to contracts signed before the end of July. Customers who signed contracts from the beginning of August onward do not have to pay an exit fine or any other fee in order to switch companies.
Communications Minister Moshe Kahlon, who was behind the measures, said, “The era in which a customer requesting to move from one company to another was required to pay unreasonable fines is over. From today, the customers will reap the benefits of real competition.”
The Communications Ministry said in a statement that the regulation is part of the process of removing barriers to customers wanting to move between service providers. It said that until now, customers had been forced to pay high exit fees that had prevented them from switching providers, “even if they were not interested in continuing to receive service from the current company.”
On Monday, the Knesset Economics Committee passed the first reading of a bill to cancel exit fines altogether on existing contracts.

Committee chairman Carmel Shama-Hacohen (Likud) said he would address a new ploy used by mobile phone companies in which they waive exit fines for customers who switch companies, but instead slap them with outrageous fees for smartphone devices that they offered for free as part of the contract.
“We have moved from fines on contracts to fines on mobile devices,” said Shama- Hacohen.
“It appears this will be an ongoing story, up until the cellular companies understand that they must profit from the sale of minutes and data and not from devices.”