T-Mobile US (NYSE:TMUS) introduced a new version of the "Jump!" handset upgrade program that will let customers upgrade their smartphones up to three times every 12 months.
The new program, called "Jump! On Demand," is part of a series of initiatives T-Mobile will kick off this summer as part of its "Uncarrier" campaign called "Uncarrier Amped." Based on the new handset upgrade program, T-Mobile plans to amplify or modify existing uncarrier programs. The new Jump program starts June 28.
Matt Staneff, T-Mobile's senior vice president of customer loyalty, said in an interview with FierceWireless that the Jump On Demand announcement "is the start of a series of announcements we'll make where we're really amping up our signature announcements in the marketplace already." T-Mobile might not change or amplify all of its "uncarrier" moves, he said, but the push "will definitely impact several of them."
Under the new Jump program, customers can upgrade to a new smartphone for $0 down and pay no sales tax with qualifying credit, followed by a monthly device payment. Customers can upgrade to a new phone whenever they want, as much as three times per year. When customers want to upgrade, they will need to bring in their existing phone, show that it is in good working order and move to a new phone. T-Mobile is removing the $10 monthly program fee that had been associated with Jump, but is also removing insurance--so if customers want phone insurance, they will need to pay an extra $8 per month.
With Jump On Demand, customers can upgrade anytime they want. However, if they make payments on their phones for 18 months, they can make a final payment to cover the remaining full retail cost of the phone and keep the phone. Additionally, customers can pay off their Jump On Demand plan at any time by paying the remaining payments in advance and keep their phone without penalty.
T-Mobile said Jump on Demand is available right now only for the iPhone 6, iPhone 6 Plus, Samsung Galaxy S6, Galaxy S6 Edge, Galaxy Note 4 and LG G4, with more on the way. Existing Jump customers can get a new smartphone with Jump On Demand the next time they upgrade, and they won't have to pay the extra $10 per month fee.
Under the regular Jump program, which is continuing, customers need to pay $10 per month and sales taxes at the time of purchase. Customers also need to pay off 50 percent of their phone's cost before upgrading.
"While the carriers are breaking every promise they've ever made with their knock-off upgrade programs, we're racing full speed ahead, making one of our most popular moves even better," T-Mobile CEO John Legere said in a statement. "JUMP! On Demand is the best way to get a new smartphone whenever you want. Zero out the door. Zero at upgrade. Zero fees. Zero wait. Zero BS."
For a limited time, T-Mobile also said customers can get a 16 GB Apple (NASDAQ: AAPL) iPhone 6 for $15 a month with Jump On Demand when they trade in their current smartphone, which is lower than similar offers on monthly installment plans from other carriers.
U.S. wireless carriers have embraced handset upgrade and equipment installment plan (EIP) programs because it cuts subsidy costs for them and lets them realize more equipment revenue up front, even if the installment plans also have been associated with a drop in service revenue. T-Mobile started the trend away from subsidized devices and contracts more than two years ago, in March 2013. In July 2013 T-Mobile unveiled its handset upgrade program, Jump, and less than a week later AT&T unveiled Next.
AT&T's Ralph de la Vega, CEO of the carrier's Mobile & Business Solutions Group, said earlier this month that he thinks the carrier will eventually move away from two-year contracts and subsidized smartphones because of consumer demand. AT&T said 65 percent of its postpaid smartphone gross adds in the first quarter came from its AT&T Next plans, up from 58 percent in the fourth quarter.
Several weeks ago AT&T's national retail partners and third-party dealers began moving toward offering just AT&T's Next equipment installment plan option, in which customers do not get a subsidized device, but instead pay off their phones through monthly payments and can upgrade to a new phone earlier.
In late May Verizon Wireless (NYSE: VZ) changed its Edge EIP program so that customers will need to pay off the full cost of their devices before they upgrade. However, they will now be able to do so at any time and will be able to keep their smartphones once the device is fully paid off instead of having to turn them in. Previously, Verizon said customers needed to wait 30 days after they purchased their device to upgrade and needed to pay off 75 percent of the device's cost. When Edge was first introduced in the summer of 2013, customers only had to pay off 50 percent of the device's cost before upgrading.
Sprint (NYSE: S) offers both phone leasing programs, in which customers pay a monthly fee on their device and then turn it in after two ears, as well as a program called Easy Pay, in which customers also pay off their devices in monthly installments and smartphones and feature phones may be eligible for annual upgrades while on certain qualifying plans. Under both plans, customers can purchase their device with Easy Pay and add the Early Upgrade option for $10 per month. After they have paid the $10 charge for 12 consecutive months, they can turn in their device and upgrade to a new device.
Current Analysis analyst Tammy Parker said that "Jump on Demand will help T-Mobile differentiate itself from AT&T and Verizon, which don't offer lease options for smartphones, and will put it in direct competition with Sprint in the leased devices segment."
"Jump On Demand builds upon T-Mobile's original Jump early upgrade program it unveiled two years ago. This highlights the fact that, as T-Mobile depletes its bucket of earthshaking Un-carrier moves, it's taking a look back to identify ways to enhance its earlier efforts to satisfy current market demands," Parker added. "The 'Un-carrier Amped' moniker is an umbrella term for a series of upcoming Un-carrier updates that T-Mobile will use to further cement its image as the wireless market's rebel and value leader."
For more:
- see this release
- see this T-Mobile page
- see this CNET article
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