T-Mobile on Wednesday launched an unusual phone upgrade program that allows customers to get a new phone when they want, up to twice a year, that starts six months after enrolling in a program that costs $10 a month.
Most wireless carriers require a two-year wait before providing an upgrade, but T-Mobile CEO John Legere bashed that practice as "absolutely ridiculous" during comments at a New York City press event.
The upgrade program, called Jump!, starts Sunday and allows users to switch to a new phone after the first six months of enrolling with T-Mobile. Legere noted that the $10 monthly fee is just $2 more than most customers pay for smartphone protection.
The $10 covers damaged phones and also guarantees that customers will get new customer network service plan pricing when they upgrade. Damaged phones could be susceptible to a deductible fee, depending on how serious the damage is, of up to $170. Phones must be in good working order to avoid the deductible, which means they cannot have a cracked screen or visible water damage and must be able to boot.
T-Mobile, which launched a set of "un-carrier" initiatives in March, also said it has expanded its LTE network to reach 157 million people in 116 cities, including 73 of the largest 100 U.S. cities, such as New York, Los Angeles and Miami.
Neville Ray, chief technology officer for T-Mobile, said the carrier was able to build out its LTE coverage in six months, much faster than the three to four years required of AT&T, Verizon Wireless and Sprint. He said the LTE speeds will have average download speeds of 10 Mbps to 20 Mbps.
"Those are phenomenal speeds," he said.
T-Mobile also will launch on Sunday a "Simple Choice" plan offering unlimited talk, text and Internet for four lines for $100 a month and without the requirement of a contract or credit background check.
T-Mobile also said it will begin carrying the Sony Xperia Z exclusively on July 17 for $99.99 down with 24 equal monthly devices payments of $20. The Nokia Lumia 925 will also go on sale July 17 for $49.99 plus 24 equal monthly payments of $20. It is T-Mobile's first LTE Windows Phone.
In remarks, Legere said T-Mobile's "un-carrier" strategy for no contract plans has worked especially well in capturing new customers who could have gone to Verizon, AT&T or Sprint.
Some analysts have said that selling the iPhone 5 at T-Mobile has had a big impact on T-Mobile's success, but Legere dismissed the iPhone's impact. "There's something huge happening here," he said. "It's not just a small change in [selling] iPhone, it's a revolution."
Mark Lowenstein, an analyst at Mobile Ecosystem, said the Jump! upgrade program at T-Mobile will help retain customers. "T-Mobile is clearly tapping into the group of subscribers who would upgrade more frequently if they could," he said. "Certainly T-Mobile will steal some subscribers" from other carriers. "A subscriber who is on a plan and then additionally investing $120 a year [$10 a month] for the privilege of an early upgrade is less likely to churn."
Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is [email protected].
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