T-Mobile to allow frequent phone upgrades for fee

Published on NewsOK Modified: July 10, 2013 at 5:14 pm •  Published: July 10, 2013
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NEW YORK (AP) — Ever worry about buying a new phone, only to see a better one come out just two weeks later? Phone companies normally make you wait two years before upgrading to a new device. T-Mobile will now let you upgrade twice a year for just $10 a month.

T-Mobile US Inc. had already broken industry convention by ditching two-year service agreements and selling phones on installment plans. But T-Mobile's installment plans typically ran two years as well, so customers had to wait that long for a cost-effective upgrade.

With the new Jump plan, T-Mobile customers will be able to have those remaining payments waived. The plan includes insurance to cover lost or stolen phones, as well as damage. Think of the new Jump plan as extending the insurance to cover phone envy when something better comes out.

"We're going to attack what I believe is the single and most offensive wireless practice head on," T-Mobile CEO John Legere said at Wednesday's announcement. "Two years is too long to be locked into phones."

In new television commercials, T-Mobile proclaims, "Upgrade when you want, not when you're told."

T-Mobile, the No. 4 U.S. cellphone carrier, has been trying to differentiate itself from bigger rivals by shattering longstanding industry practices. In March, T-Mobile dropped conventional two-year service contracts in favor of selling phones with installment plans. It has made the change a centerpiece of its marketing, calling itself the "Un-carrier."

T-Mobile said the new Jump plan was part of phase 2 of Un-carrier. Also Wednesday, T-Mobile introduced new family plans without credit checks, so households without good credit ratings won't be charged more.

The Jump plan will be available starting Sunday and will cost only a few dollars more a month than typical phone insurance plans, T-Mobile said. But under Jump, customers will still have to pay a deductible ranging from $20 to $170 if a phone is lost, doesn't work, has water damage or has a cracked screen.

In addition, customers who replace phones that aren't lost or damaged will still have to pay the usual price for the device, typically $100 up front and $20 a month for two years for high-end phones such as the iPhone 5 and the Galaxy S4. What Jump does is waive any remaining payments when someone decides to upgrade because a newer phone with better features is out. The customer does not get a refund on what was already paid.

The new plan isn't for everyone. Let's say you decide to upgrade after 18 months instead of two years. Without Jump, you'd have six months of payments to still make, or $120. Jump would have cost you $180 during those 18 months. You break even if you replace the phone at 16 months — you have $160 left of payments, and you pay $160 for Jump.