T-Mobile gets 'jump' on the competition with new handset upgrade program

T-Mobile US (NYSE:TMUS) rolled out what it is calling the "phase II" of its un-carrier strategy with the introduction of a new handset upgrade program, called Jump, that allows customers to upgrade their wireless devices up to two times per year after an initial six-month enrollment period.

In addition, company executives, speaking at a media event in New York City, revealed more details on the company's LTE deployment and introduced a new prepaid family plan. CEO John Legere also used the event as a forum to tout T-Mobile's role in revamping the wireless industry and chastise his competitors (particularly AT&T (NYSE:T)) for what he calls a "stupid, broken and arrogant industry."

"Customers are fed up with AT&T and coming to us in droves," Legere said. "What's keeping AT&T up at night is us. Our store traffic is double, our credit apps have tripled."

Legere said the Jump handset upgrade plan was developed because customers said having to wait two years to upgrade their handsets is "the single most offensive wireless policy. Two years is too long to wait. Upgrade when you want, not when you are told," he added.

Starting Sunday, customers can enroll in Jump by upgrading to a new phone, financing it through the T-Mobile EIP (equipment installment plan) and then paying $10 per month per phone. The $10 fee lets customers upgrade their phone twice every year after the initial six month enrollment period has expired. T-Mobile says the $10 fee not only pays for the enrollment in the Jump program but also is an insurance plan that will protect the customer if their device malfunctions, is damaged or is lost. T-Mobile emphasized that the insurance program alone is $8 per month, so enrolling in Jump is just an additional $2 per month.

According to Mark Lowenstein, managing partner of Mobile Ecosystem and a FierceWireless contributor, the Jump plan offers subscribers flexibility. "For the subscriber who wants to upgrade their device more frequently than average, Jump makes sense," Lowenstein said.

He added that T-Mobile will likely benefit from a reduction in churn because a subscriber who is on the company's EIP program and then invests $120 per year for the Jump program is less likely to churn.

Besides Jump, T-Mobile also expanded its LTE coverage to 157 million POPs and 116 markets and introduced three new LTE devices, including the Sony Xperia Z, the Nokia Lumia 925 and the Samsung Galaxy Tab 2, bringing T-Mobile's total LTE smartphone portfolio to nine.

Interestingly, the company also introduced a Simple Choice plan for families beginning July 14 that will give them unlimited talk, text and Web and up to 500 Mb of data for $100 per month. The innovative part of this is that the operator is not requiring a credit check or an annual service contract. According to T-Mobile CMO Mike Sievert, there are one-third of families in the United States that have not been able to tap into the savings of a family plan because they don't qualify for the credit check. 

For more:
- see this press release
- see this related analysis from Roger Entner

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