Will T-Mobile’s new plan “jump start” its subscriber base? After earlier eliminating carrier subsidies, the company further distanced itself on Wednesday from the other Big Four carriers, Verizon Wireless, AT&T, and Sprint, with a new initiative called “JUMP” or Just Upgrade My Phone. It’s a way for those who constantly must be on the bleeding edge of phones to satisfy themselves.
JUMP allows subscribers who pay an extra $10 monthly to upgrade their phones twice yearly for the same cost a new subscriber would pay. Compare that to T-Mobile’s rivals, which, in general, only allow subscribers to upgrade their devices every 24 months without paying a hefty unsubsidized price for their handsets.
There are exceptions to paying the full price, though. AT&T, for example, offers pro-rated discounts to on-contract subscribers, once they have completed six months or more of your Service Commitment.
The subsidy varies depending on device and time left on a subscriber’s contract.
An AT&T customer could, after 6 months, get a 16GB iPhone 5 for approximately $450 ($199.99 two-year price + a $250 early upgrade smartphone charge), $200 less than the full retail price of $650.
If this hypothetical customer traded in their existing iPhone 4S (assuming that’s what they are moving up from), they could receive up to a $200 promotional credit, which means the customer would pay $250 versus $200 if they had been eligible for a normal upgrade.
JUMP also includes an insurance program that protects against handset malfunction, damage, loss or theft, although customers turning in damaged phones or replacing lost or stolen devices must pay a deductible.
T-Mobile CEO John Legere said:
At some point, big wireless companies made a decision for you that you should have to wait two years to get a new phone for a fair price. That’s 730 days of waiting. 730 days of watching new phones come out that you can’t have. Or having to live with a cracked screen or an outdated camera.
We say two years is just too long to wait. Today, we’re changing all that with the launch of JUMP! Now, customers never have to worry about being stuck with the wrong phone. And, yes —- it’s really as good as it sounds.
T-Mobile’s earlier announced Un-carrier or Simple Choice plans eliminates the carrier subsidy, but still allows customers to buy a phone with a low up-front cost, by spreading payments across a two-year span.
Customers must make up the difference if they leave before the phone is fully paid for, of course.