Early Termination Charges

When canceling a service contract with a commitment period, different early termination charges (ETCs) can be applied based on when the contract is canceled within the contract term.

ETC Schedule

During purchase, the ETC schedule is stored in the purchased offer, and rating always uses the stored ETC schedule unless it is overridden at cancelation. For more information, see the discussion about overriding ETC schedules at purchase or cancelation.
Note: Modifications to the ETC schedule object in pricing do not affect contract offers already purchased.
An ETC schedule can be configured for segments of the contract within and outside the commitment period. For example, as shown in Figure 1, a 12-month contract with a commitment period of 6 months has an ETC schedule that specifies the ETC is €10 if the contract is canceled within the first 3 months, €8 if the contract is canceled after 3 months and up to 6 months, and no ETC if the contract is canceled after 6 months of the contract start.
Note: The actual charge, in this example, €10, is not part of the ETC schedule object. The charges are configured as pricing components in the offer.
Figure 1. Contract Commitment Period

Contract Commitment Period

The ETC for each segment can be a combination of one or more of the following:
  • Fixed fee, for example, €5.
  • A multiple of the number of periods (cycles) completed in the contract. For example, 1.5 * periods completed.
  • A multiple of the number of periods (cycles) remaining in the commitment period. For example, 3 * periods left in the commitment period.
  • A multiple of the number of periods (cycles) remaining in the contract. For example, 2 * periods left in the contract.

ETC Schedule Details

If a service contract offer is associated with an ETC schedule, the ETC schedule details are held by the pricing object MtxContractEtcSchedule which contains the units for the range boundaries (ContractEtcScheduleRangeUnit), and one or more ranges represented by MtxContractEtcSchedculeRange. Each range includes the following attributes:
  • Name — Name used in normalizers to distinguish the range.
  • Id — ID used in normalizers to distinguish the range.
  • UpperBound — Upper boundary of the current range. Semantics for the range boundaries include:
    • The lower boundary of the range is not explicitly configured, it is implicitly the upper boundary of the previous range. The lower boundary of the first range is always from the contract start.
    • The upper boundary of the range is inclusive. If the upper boundary is specified as INFINITY, the range is up to the end of the contract, or forever if the contract is set to open term.
    • There are no gaps in ranges, however, ranges do not have to cover the entire term of the contract. For example, a 24-month contract with a 12-month commitment period has ranges for the first 12 months and the next 6 months, but no range in the schedule for the last 6 months.

Normalizing on an ETC Schedule

If a service contract offer is associated with an ETC schedule, the recurring charges can normalize on MtxContractScheduleNormalizationInfo to specify different charges for ranges within and outside the commitment period. For more information, see the discussion about recurring charges.

When a contract offer with an ETC schedule is canceled, MtxContractScheduleNormalizationInfo contains information from the ETC schedule with respect to the cancelation time. This information is used in normalization for selecting the ETCs, and includes the information shown in MtxContractScheduleNormalizationInfo Fields.
Table 1. MtxContractScheduleNormalizationInfo Fields
Name Type Flags Description
RangeName string Optional Name of the range from the contract schedule applicable at the time of recurring or cancel.
RangeId unsigned int32 Optional Id of the range from the contract schedule applicable at the time of recurring or cancel.
RangeUnit unsigned int32 Optional Unit of the lower and upper bounds of the range.
LowerBound decimal Optional Lower range boundary derived from the upper boundary of the previous range in the ETC schedule. The lower boundary is exclusive, and the first range value is set to 0.
UpperBound decimal Optional Upper boundary of the range from the ETC schedule. The upper boundary is inclusive.
PeriodsCompleteInContract unsigned int32 Optional Number of periods completed from the contract start time up until the time of recurring/cancelation. It is in the same unit as the contract schedule range.
PeriodsRemainingInCommitmentPeriod unsigned int32 Optional Number of periods remaining from the time of recurring/cancelation up to the commitment period. Set to 0 if the recurring/cancelation is after the commitment period. It is in the same unit as the contract schedule range.
PeriodsRemainingInContract unsigned int32 Optional Number of periods remaining from the time of recurring/cancelation up to the end of the contract. Set to 0 if the contract is open term. It is in the same unit as the contract schedule range.

These fields can be used as the scale basis for formulas in the cancel charge components of the contract offer.

Figure 2 shows a 24-month contract with a 12-month commitment period, and an ETC schedule.
Figure 2. Early Termination Charge Schedule

Early Termination Charge Schedule

Based on the ETC schedule shown in Figure 2, MtxContractChargeNormalizationInfo contains the details of the range within whose boundaries the cancel time falls, as shown in Figure 3.
Figure 3. MtxContractChargeNormalizationInfo

MtxContractChargeNormalizationInfo Details

For more information about normalizers, see the discussion about normalizers in My MATRIXX Help.

Configure Pricing to use ETC Schedules

ETC schedules are specified in the contract at pricing time. The ETC schedule pricing object is referenced by ID in a service contract, and the service contract is then referenced in the catalog item with the offer or bundle template.

Normalizers can be applied on MtxContractScheduleNormalizationInfo to specify different ETCs based on the range name, range ID, periods completed in the contract at cancelation time, or periods remaining in the commitment period/contract at cancelation time.

These fields can be used as the scale basis for formulas in the cancel charge components of the contract offer.

Override ETC Schedules at Purchase or Cancelation

To override an ETC schedule at the time of purchase or cancelation, specify a new set of upper boundaries for the ranges, and the range units, through the purchase offer or cancelation SubMan APIs. For details, see the discussion about MtxPurchasedOfferData, MtxCancelOfferData, MtxRequestDeviceCancelOffer, MtxRequestSubscriberCancelOffer, and MtxRequestGroupCancelOffer SubMan APIs in MATRIXX Subscriber Management API.

When overriding an ETC schedule, only the upper boundary for the range and the range unit can be overriden; boundaries cannot be added or removed. For example, as shown in Figure 4:
  • Original ETC Schedule:
    • Name = First Range, Id = 1234, UpperBound = 6
    • Name = Second Range, Id = 5678, UpperBound = 12
    • Name = Last Range, Id = 8765, UpperBound = 24
  • Specified Override Array:
    • {7, 9, 24}
  • New ETC Schedule:
    • Name = First Range, Id = 1234, UpperBound = 7
    • Name = Second Range, Id = 5678, UpperBound = 9
    • Name = Last Range, Id = 8765, UpperBound = 24
Figure 4. Override an ETC Schedule

Override an ETC Schedule

Recurring Charges

Recurring charges can be specified based on the commitment period. If the contract offer is associated with an ETC schedule, the recurring charges can normalize on MtxContractScheduleNormalizationInfo to specify different charges for ranges within and outside the commitment period.

Additionally, different recurring charges, discounts, and grants can be applied based on whether the recurring cycle falls within or outside the commitment period.

During the recurring operation, MtxContractScheduleNormalizationInfo holds ETC schedule information with respect to the recurring time.

The fields listed in MtxContractScheduleNormalizationInfo Fields can be used as the scale basis for formulas in the recurring charge components of the contract offer.

If the contract offer is not associated with an ETC schedule but has a commitment period, recurring charges can be specified based on whether the recurring cycle is within or outside the commitment period. In pricing, recurring charge pricing components could normalize on the MtxPurchasedOffer.IsCurrentCycleInCommitmentPeriod field to specify different charges.