Sprint Announces New Device Installment Plan

Only days after suddenly killing its "One Up" device upgrade program, Sprint has introduced “Easy Pay,” its new installment plan for device purchases that basically allows  customers to upgrade their devices whenever they want.

The Easy Pay program is an installment plan allowing customers to pay off the cost of a device over 24 months, after paying a down payment and taxes.

You might argue that offering consumers an installment buying plan over 24 months is not too much different from bundling a device with a two-year contract plan. But the latter is less transparent and some might consider such bundled plans unfair to at least some consumers.

If you assume that the monthly recurring cost of a bundled subscription plan also includes the recovery of any device subsidies, one might argue that a consumer breaks even up to the point where the device has been paid off.

After that point, the mobile service provider keeps charging the bundled rate, including subsidy cost recovery, even after the device investment has been fully amortized.

That arguably raises the profit margin on an account substantially. Unbundled plans that separate device costs from recurring service costs have the clear advantage of transparency: people know what “service” costs, as distinct from “buying a phone.”

That is one reason why Sprint offered customers on One Up a $15 a month discount on recurring costs of service. But Sprint might have found relatively small uptake of the feature.

Also, Sprint now seems to be focusing on multi-line account discounts with its “Framily” plans. One might argue that the key difference between One Up and Easy Pay is that the new program simply focuses on the installment plan, and does not imply anything particular about the service plan.

That arguably is easier for consumers to understand, and for customer service representatives to explain.

To participate, existing Sprint customers can go to www.sprint.com/upgrade to check their eligibility. Then, they simply purchase an eligible wireless phone through the Sprint Easy Pay program, paying for it in 24 monthly payments.

Existing Easy Pay participants can also upgrade their phone whenever they want but must first pay off their balance to receive a new phone.

Once they’ve upgraded and purchased their new phone through Sprint Easy Pay, Sprint customers have the option of keeping their old phone or selling it back through Sprint’s Buyback program.