AT&T announced that it will prorate early termination fees, providing “greater flexibility for wireless customers.”

Starting May 25, customers will no longer be required to pay a flat rate early termination fee; instead, AT&T’s $175 fee, will be lowered by $5 every month for the term of the contract. However the $175 fee will still apply to new and renewing customers who sign one- or two-year service agreements before May 25.

AT&T did note that it offers options for customers who want to avoid fees; users can always pay full price for a phone and sign up for a month-to-month service plan, or bring in a compatible GSM handset and buy a SIM with a month-to-month service plan or go prepaid with AT&T’s GoPhone.

Verizon Wireless began prorating early termination fees in 2006; Sprint Nextel and T-Mobile announced last year that they would also make changes to their fee structures this year.