Wishing you could swap cellular carriers without paying the usual $150 to $250 early termination fee? You’re so not alone. Analysts say more than a quarter of users change carriers annually, an expensive proposition for a family or growing business.
Several websites have sprung up to play matchmaker between folks looking to wiggle out of their cellular contracts early and bargain hunters willing to assume those obligations. It may be hard to imagine anyone wanting the phone company you’re trying to shake, but like they say: One man’s trash is another’s treasure.
Cell swap sites are nothing more than marketplaces like Craigslist or your garden-variety swap meet. You post an ad with your deal’s particulars on a site like Cellswapper.com, Celltradeusa.com or Resellular.com. Then, for a $15 to $20 one-time fee, the sites forward you the contact information of interested parties. Prospective sublessees get to browse the listings and opt in for free.
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The websites provide introductions only; the involved parties have to cut a deal and reassign the contract through the carrier. Contract reassignment is perfectly legal and tolerated by carriers, says Celltradeusa.com co-founder Eric Wurtenberg. But they’ll want to run a credit check on the assignee and might balk if there’s something hinky about the deal.
About a third of advertisers get a taker within a week, and about half get one within two weeks, says the 29-year-old entrepreneur. But if you have 23 months left on your contract or a so-so phone, you may have to wait longer.
“The principal buyer motivation is to get equipment on the cheap,” explains Wurtenberg, whose company is on track to make $1 million this year. “There are a lot of BlackBerry hunters and people trying to get other hot phones with maybe a seven-month contract and without the usual $35 activation fee.”
Besides all-too-common gaps in service, people often want out of contracts because they’ve moved, experienced changing economic circumstances, or they just crave a fancy phone or deal dangled by another carrier.
Early termination fees are the last impediment to complete cellular mobility. By law, you can already take your phone numbers to a new carrier.
Originally published in the March 2007 issue of Entrepreneur Magazine