Feature Article

July 11, 2013

T-Mobile Phone Upgrades Frequent But Not Free

I don’t know if I’m the only one who experiences this on a regular basis. It seems that every time I finally decide on a purchase, as soon as I pay for it, the product becomes outmoded. There are so many new products constantly coming out that the lag time between them is getting shorter and a new “improved” model is now available.

Back in March, T-Mobile decided that it was going to drop the two year contract. It introduced the Un-Carrier Plan. This was a break from the original “must sign a two year contract” plan that all the other carriers still use. In addition, it decided to offer the iPhone for the first time ever. This, in turn, has helped Apple earn a little growth in its market share.

According to John Legere, CEO at T-Mobile, "We're going to attack what I believe is the single and most offensive wireless practice head on. Two years is too long to be locked into phones." On July 10, 2013, T-Mobile entered what is being referred to as Phase 2.

This second phase will allow T-Mobile’s users to change phones without waiting for two years. We should be clear that although you are not tied into a two year contract, it could still take you up to two years to pay for a phone going through T-Mobile.

Rather than force would-be customers to pick out how many minutes and text messages they want, T-Mobile’s Simple Choice plan gives everyone unlimited amounts of both. Legere’s idea is that you don’t have to wait two years to get a discounted price.

This is where Phase 2 comes into play. It is being called the “Jump Plan.” It will be available this Sunday, July 14, 2013. What is supposed to make this plan so appealing is that it should only cost a few dollars more per month than typical phone insurance plans. 

Under the Jump Plan, customers will still have to pay a deductible if a phone is lost, doesn't work, has water damage or has a cracked screen. This cost can be anywhere between $20 and $170. Additionally, customers who replace phones that aren't lost or damaged will still have to pay the usual price for the device. This can typically be $100 upfront and $20 a month for two years on the high-end phones.

Before you go running over to T-Mobile to get on the Un-Carrier Plan with Jump options (doesn’t sound quite as nice when it’s in print!), know that this type of plan is not for everyone. This is the way that it is described: “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.”

There are a few other things to keep in mind when you are trying to decide if these plans are best for you. You would still need to pay the upfront cost of $100 for each new phone. Then there are the monthly payments that extend for two years. If you upgrade two times a year that would be three extra phones over the two year period. As it turns out, the fourth phone is the one you would have gotten anyway when the two years are up. That works out to $540 for the luxury plus $300 for the phones and $240 for the cost of Jump.

In addition to offering the iPhone 5 for the first time, T-Mobile announced that it would exclusively offer the Sony Xperia Z in the U.S. This smartphone is supposed to have a high resolution display and be one of the most water resistant phones available.

T-Mobile is making strides to break away from the “locked in” two-year contract way of thinking. However, before you decide, you have to take the information listed above in hand and make a determination as to whether this is something that is actually worth it for you.

Edited by Ryan Sartor

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