T-Mobile will let you upgrade your smartphone anytime you want
But there's a catch: You have to commit to a new smartphone as part of the new upgrade program. Also, only a select number of flagship phones are available for an upgrade.
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T-Mobile is giving its smartphone upgrade a serious boost.
The upstart wireless carrier on Thursday introduced a new program that will allow customers to upgrade their smartphones whenever they want, up to three times a year. That stands in contrast with traditional plans that allow you to upgrade only after you've paid off a portion of your phone or after your two-year contract is up.
But Jump On Demand, which kicks off on June 28, has a few catches of its own: You have to purchase a new smartphone to join the program, so many existing T-Mobile customers can't walk in and demand an upgrade on Sunday. When you opt to upgrade, you need to turn your existing smartphone in. Also, only select flagship smartphones like the Apple iPhone 6, Samsung Galaxy S6 and S6 Edge, and LG G4 will be available for upgrades, although the company hinted at more products down the line.
It's the latest promotion from a company that's made a flurry of moves in its Uncarrier drive to attract customers from rivals. So far, it's proven effective, with T-Mobile's growth in customers who pay at the end of each month -- a lucrative demographic known as postpaid subscribers -- outstripping that of the rest of the national players. T-Mobile, the nation's fourth-largest wireless carrier, teased that there would be more promotions to come this summer.
The first promotion under the company's new "Uncarrier Amped" campaign, Jump On Demand also comes amid a renewed sense of competition in the wireless industry, with No. 3 Sprint, which had been steadily losing customers over the last two years, far more active in marketing and promotions in recent quarters. The activity between the two smaller players -- essentially at a dead heat when it comes to total subscribers -- has drawn the attention of the big two, Verizon Wireless and AT&T. The result: more deals and better packages of data for consumers.
Jump On Demand requires customers to make monthly payments on a smartphone for 18 months. After 18 months, you can turn in your smartphone and leave the service, upgrade to another phone for a new plan or make a final payment, which is the equivalent of the final six months of payments, and keep the device. The other benefit is the elimination of upfront costs and taxes that T-Mobile customers had to pay with its typical monthly installment plans.
"This is a really big move for us," T-Mobile Chief Operating Officer Mike Sievert said in an interview. "Providing this kind of flexibility is expensive and difficult, but we think it's worth it."
The program is a mix of an equipment installment plan and the leasing plan pioneered by Sprint. Sprint has won over customers with its own leasing program, which charges $20 a month, but allows you to swap out for a new smartphone every 24 months (a pricier plan allows you to upgrade even faster).
"Jump on Demand is T-Mobile's way of getting into the device-leasing business while simultaneously satisfying customers who desire easier, more frequent smartphone upgrades," said Tammy Parker, an analyst at Current Analysis.
The announcement represents an upgrade over its existing smartphone upgrade program, called Jump, which is still an option for consumers. Jump originally allowed you to upgrade your smartphone after 12 months, or after you've paid off half the cost of the device. The program cost $10 a month extra, but came with insurance.
Jump On Demand sheds the $10-a-month fee, but drops the insurance component too. Customers can pay $8 a month for insurance.
The original Jump was the second Uncarrier program announced two years ago. It was one of the first significant moves T-Mobile made to shake up the industry. After Jump launched, AT&T and Verizon Wireless followed suit with their own upgrade programs.
But last month, Verizon killed off the ability to upgrade your smartphone early, instead requiring customers to pay off the cost of the entire device before making a switch. Under a monthly payment program, that can take as long as 24 months. At the time, Verizon said the move was made to simplify the purchasing process.
Sievert called out Verizon specifically when criticizing the "knock-off upgrade programs" that have slowly walked back their key benefits. Verizon wasn't available for comment.
As with other replacement programs, the smartphone has to be in good working order in order to qualify for a trade-in. But you can't just bring in any smartphone and get an upgrade -- you need to sign up for a new phone and enter the program.
Customers on the existing Jump program can use their upgrade to get into Jump on Demand. Anyone who wants to sign up will have to go to a T-Mobile store initially, although Sievert said the company plans to expand the option to other retailers and its website soon.
In addition, T-Mobile said it is offering a promotional offer of $15 a month for the base model of the iPhone 6. The deal goes after Sprint's own $20-a-month plan.
"We think it's the best deal that has ever been offered on an iPhone," Sievert said.
Updated at 7:03 a.m. PT:Included additional background, along with comment from T-Mobile and an analyst.