T-Mobile is shaking up the wireless industry yet again with a new device upgrade program announced Wednesday that is supposed to make it easier for its customers to upgrade to new devices.
The company's CEO John Legere said during a press conference in New York City, where the new plan called Jump was unveiled, that it's all about giving customers what they want. He bashed competitors, such as AT&T and Verizon Wireless, which have recently extended their device upgrade cycles to 24 months, which is the length of a typical handset contract.
"Two years is too long to be locked into a phone," he said."You should decide when you upgrade, not your wireless company."
To help understand the nitty gritty details of this new plan, CNET has put together this handy FAQ.
What is the new Jump plan?
This is a new device upgrade program that T-Mobile introduced at its press conference Wednesday, which allows customers who are on its no-contract plans to upgrade their devices more frequently. The new no-contract plans introduced earlier this year, require that customers buy their devices at full price. T-Mobile offers a device payment plan, which includes a down payment usually around $200 and then 24 monthly payments until the phone is paid off.
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Now customers will be able to upgrade up to two times per calendar year even if their phone is not paid off yet. Customers on existing plans and on new plans can start signing up for the service on Sunday July 14.
How much does this new plan cost?
The Jump plan adds an additional $10 a month to your phone bill.
Do I have to wait a certain amount of in between device upgrades?
You have to be enrolled in the Jump program for six months before you can upgrade for the first time. But after that you could get a new phone two months later if you wanted. However, you are only allowed two upgrades within a 12-month period. So if you upgrade your device in May and then upgrade in July, you will have to wait until the following May to be eligible for another upgrade.
If I buy my device on the installment plan and I want to upgrade to a new phone, but I haven't paid off my existing phone, do I have to pay off my old phone first?
No this is the beauty of the program. As long as you have been paying for the Jump plan for at least six months you are eligible to trade in your old phone, and then you can purchase a new phone at the subsidized or regularly advertised down-payment price for that device. You will not have to pay off your existing phone. Once you've purchased the new phone, you will be the monthly finance fee until the devices is paid off or until you want to upgrade again.
So I don't get to keep my old phone when I upgrade like I would if I upgraded while on a contract plan?
That is correct. You will have to turn in your old phone. And so long that it's in working condition, you will be eligible to purchase any other phone you want at the advertized "down payment" price. And then you will have to make monthly payments on that phone.
This means you won't be able to pass old phones down in the family. And you also won't be able to sell older devices to make cash back to either pay for a new phone or to just get the cash.
If I am already paying for an extended warranty and/or insurance, does Jump take the place of that, or will I be paying for Jump in addition to these services?
Jump takes the place of T-Mobile's existing Premium Handset Protection (PHP) insurance plan, which replaces your phone if it's lost, stolen, damaged, or goes haywire. T-Mobile's PHP Bundle, which includes an extended warranty for device malfunction, insurance against damage and theft, and mobile security, costs $11.99 monthly for premium smartphones, such as the Note II or iPhone, and $7.99 for lower-end devices. Since Jump will take the place of the PHP bundle and give customers a warranty on the device, you won't have to pay extra for insurance and/or a warranty. Instead you just pay the $10 for Jump.
Are new T-Mobile customers automatically enrolled in the Jump plan?
Jump is an optional program. So if you're interested, you have to sign up within 14 days of activating your phone with an Equipment Installment Plan. This is the plan that allows customers to put a down payment on the device and then pay for the balance of the phone over 24 months instead of paying for it all at once. After that, enrolled customers can drop Jump at any time.
Can existing T-Mobile customers sign up for Jump?
For a limited time, Jump is available for all T-Mobile customers starting July 14. Customers buying a new phone under an installment plan can enroll in Jump within 14 days of activating their phones. Customers who currently are paying off a phone on T-Mobile can also enroll in the program starting July 14 if their phone is in working condition. This offer ends in 30 days.
After 30 days, customers must have a phone under the equipment installment plan and they must have the Premium Handset Protection insurance plan to enroll in Jump. Customers do not necessarily need to buy a new phone to qualify if they already have a phone that meets these requirements, a company spokeswoman said.
Let's say I am a new customer and want to get a phone. If I sign up for Jump, how much am I paying for a new phone?
When buying any of T-Mobile's phones you have two options; fork over a down payment and pay 24 monthly installment payments, or pay for your new phone in full at its retail cost. If you want to participate in the Jump program, you have to finance your phone. This means you will have to pay whatever down payment is required for that specific device. And then you'll have to make monthly payments on the phone either until the phone is fully paid for or until you want to upgrade again. If you pay for your device in full or you bring a device onto the T-Mobile network that is already paid for, you are not eligible for the Jump plan.
If my device is lost, stolen or damaged will I have to pay anything extra on top of the Jump fee in order to get a new one?
The Jump plan also works as an insurance plan, which means that if the phone is damaged, such as has a cracked screen or doesn't turn on or it's been lost or stolen, you will have a deductible, just as you had with T-Mobile's PHP service. The deductible varies based on the phone that you have. For instance, an iPhone 5 has a deductible of $175.
Does this deductible apply if I just want a new phone?
No, if you are able to take your device into a T-Mobile store and it turns on and there is no visible damage, such as water damage or a cracked screen, you can simply trade in your phone and purchase a new one for the subsidized/ down payment price. But if your phone has been dropped in water, won't turn. on or has a cracked screen, you will have to pay the deductible you were quoted when you originally bought your phone.
What's the catch here?
I wouldn't say there is a catch per se, but keep in mind that you are paying $10 a month or $120 a year for the ability to upgrade your device, which you still have to buy. The down payment for most high-end smartphones is around $200. Then you will also have to pay the monthly finance fee until the device is fully paid for or until you upgrade again. And when you upgrade your device, you have to trade it in rather than keeping it and either selling it or passing along to another family member. Of course, T-Mobile would point out that you are getting device insurance bundled into this price. But again, be aware that you will have to pay a deductible to replace your phone, as you have had to do in the past. And then you will still have to pay another down-payment for new phone.
For some customers, who must have the latest and greatest devices, and for people who are accident prone and need insurance on their phones, this isn't a bad deal. For everyone else, it's simply an added expense.
Updated 7-12-13 11:15 a.m. PTThis story has been updated to clarify how much customers are expected to pay they upgrade a device. T-Mobile doesn't refer to the cost of a new device as a "subsidized price" rather it calls it a "down payment." The story was also updated to clarify that customers are only eligible for the Jump plan if they are financing their phone through T-Mobile.