Sprint (NYSE: S) is going after T-Mobile US (NYSE:TMUS) with its own special program for customers who want to upgrade to the latest Apple (NASDAQ: AAPL) iPhones. Sprint is aiming to match T-Mobile with a promotional offer that will let customers get new iPhones for $15 in monthly device costs.
Sprint said that new and upgrade-eligible Sprint customers can get a 16 GB iPhone 6 for just $22 per month in device costs with its new "iPhone Forever" program. Under the program, which lasts indefinitely, Sprint said anytime customers don't have "the latest" iPhone, they are eligible to upgrade. Customers can bring their iPhone, trade it in and upgrade on the spot, Sprint said.
Customers need to purchase the device through the Sprint Lease program with $0 down at signing for $22 per month for a 21-month lease for qualified customers.
Importantly though, Sprint said that through Dec. 31, customers on any other carrier or existing Sprint customers who are upgrade-eligible and who turn in any smartphone will get a promotional rate of just $15 per month on a new iPhone. Sprint said it will pay off customers' old existing phone costs and contracts if they switch.
Sprint said new or existing customers who are upgrade-eligible can bring in any smartphone and get a 16 GB iPhone 6 and their monthly device payments will be just $15 until their next upgrade. As a special promotion, customers who get iPhone 6 and then upgrade again before Dec. 31 will continue with the discounted price of $15 until their next upgrade. When customers next upgrade after that, the leasing price will return to $22 per month.
Apple is widely expected to unveil new iPhone models in early September. Wells Fargo analyst Jennifer Fritzsche said in a research note the Sprint offer "becomes especially important if we assume Apple's future devices will support carrier aggregation for 2.5 GHz (which give S the ability to light up additional 20x20 spectrum channels and see a meaningful increase in speeds)."
She also said that Sprint's offer "is a significant announcement that offers further evidence this is the direction Sprint is moving towards as a company; a wireless carrier--focused on the leasing model. We believe Sprint is in a unique position to do this given its parent company's (SoftBank) ownership of Brightstar. By its own definition Brightstar is the number one specialized global wireless distributor -- with a strong partnership with Apple. This Softbank/Brightstar relationship gives Sprint a unique relationship vs. its other national peers."
"In addition to this, having a greater supply of CPO (certified pre-owned phones) should help Sprint lower its operating costs (handset related repair costs for those subs which have insurance) as well as allow it to increase the ability to sell refurbished devices to the prepay segment," Fritzsche added.
T-Mobile got a jump with its own earlier iPhone offer. In late July T-Mobile said customers who upgraded to a new iPhone 6 at a cost of $15 per month in device fees will be able to keep that price and swap the old phone out for the next iPhone for free.
Under T-Mobile's "Jump! On Demand" program, customers lease phones, pay a monthly device fee and upgrade to a new phone as often as three times every 12 months. When the program was announced in late June, T-Mobile said customers could get a 16 GB iPhone 6 for $15 a month with Jump! On Demand when they traded in their current smartphone, which is lower than similar offers on monthly installment plans.
T-Mobile said every customer who gets a new iPhone 6 this summer as part of the deal can simply swap it for the next iPhone if they upgrade before the end of the year. Customers will not need to change their monthly payment and will not need to pay a deposit or fees -- and they can keep paying the $15 per month on device costs.
Every T-Mobile customer who already got an iPhone 6 for $15 per month automatically can participate in the new deal. New customers who want the offer can sign up through Labor Day (Sept. 7) in participating T-Mobile stores nationwide.
T-Mobile also said that everyone who buys a new iPhone 6 with Jump! On Demand will get "exclusive priority access to the next iPhone." T-Mobile said when customers order their upgrade during the first 48 hours it's available, it will give those customers' orders priority and ship it first, along with others who qualify for priority access.
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