Verizon to sell HTC Android phone for $99.99

The new Droid phone, a Motorola Inc. and Verizon Wireless phone based on Google Inc's Android 2.0 system, is shown at a media event in New York October 28, 2009.

NEW YORK (Reuters) - Verizon Wireless said on Thursday that it would sell an HTC Corp (2498.TW) phone based on Google Inc's (GOOG.O) Android system for $99.99, potentially putting pressure on smaller carrier Sprint Nextel Corp (S.N).

The device Droid Eris, which goes on sale November 6, is very similar to HTC's Hero phone, which Sprint currently sells for $179.99, according to Sprint's website.

However, Sprint spokeswoman Michelle Leff said her company was not looking to lower the sales price of Hero.

She argued that when Verizon and Sprint monthly service fees are included in a comparison of the total cost of buying each phone, Hero purchasers end up paying less than Droid Eris users even including the Hero's higher retail cost.

The Droid Eris joins the Verizon Wireless Android phone line-up along with the heavily advertised Droid from Motorola Inc MOT.N, which also goes on sale November 6. Motorola's Droid is also based on Google's operating system.

Verizon Wireless, a venture of Verizon Communications Inc (VZ.N) and Vodafone Group Plc (VOD.L), is looking to create a buzz around its phone range for the holiday season in the hope of winning back ground lost to AT&T Inc (T.N), the exclusive U.S. provider for Apple Inc's (AAPL.O) iPhone.

Verizon Wireless also announced on Thursday that it would increase early termination fees for smartphone customers who leave the service before the end of their two-year service contract as it looks to help offset the hefty subsidies it is paying for such devices.

After November 15 new smartphone customers will face termination fees of $350, with the amount declining by $10 for each month of the service contract that has passed.

It is keeping its termination fees for more traditional phones at $175, with a $5 a month reduction of every month of the contract already lived.

Sprint said it had no intention of raising its early termination fees.

(Reporting by Sinead Carew, editing by Gerald E. McCormick and Carol Bishopric)