T-Mobile Introduces New Upgrade Service
(NEW YORK) -- It seems like every month there's a brand new smartphone, but you may get to upgrade only every year or two. T-Mobile, however, wants to speed that upgrade process. On Wednesday the cellular carrier announced a new program called JUMP, which allows customers to upgrade their phones up to twice a year.
"We are going to redefine a stupid, broken and arrogant industry," T-Mobile US CEO John Legere said at a press event in New York City. "Two years is too long to be locked into a phone. That's 730 days of watching new phones come out that you cannot have."
Customers in the rapid upgrade cycle will have to pay a $10 monthly charge. With that, after the first six months they will be able to trade in their phone for a new one. Even if your phone has been damaged, lost or stolen T-Mobile will give customers a new phone under the JUMP program. T-Mobile points out that most pay more than $10 for insurance and protection on their devices alone.
"You are covered if you drop it in the toilet or even if you run it over with your car," Legere said. "It's covered even if you just want a new phone." Some upgrades for broken or damaged phones will require that customers pay a deductible.
The JUMP program is the second major move from the trailing carrier in the last few months. In late March, T-Mobile introduced its "uncarrier plan," which did away with two-year contracts. Instead of signing a contract and getting a phone for a discounted price, T-Mobile introduced plans that allowed users to buy a phone like the iPhone 5 for $99.00 and then pay off the rest of the phone with a monthly charge of $20 for two years.
Legere, who said at the event Wednesday that the uncarrier plan was already turning around the company, aimed some comments at rival carrier AT&T. Legere knocked AT&T's customer support, saying that the company should just admit "Hi, I'm AT&T and my customers hate me." According to T-Mobile, 26 percent of likely cellphone switchers chose T-Mobile instead of the other carriers.
However, industry analysts aren't convinced that T-Mobile's good deals and freedom from contracts and phone upgrades will be enough to pull away customers who have been happy with Verizon, AT&T and Sprint's mobile networks and plans.
"If you're locked into a family or business plan on AT&T or Verizon Wireless -- or you're simply a happy customer there -- it is not likely to pull you away," Avi Greengart, research director of Consumer Devices at Current Analysis, told ABC News. "But JUMP addresses a real customer pain point, so it should help T-Mobile's churn numbers, and it may sway the undecided in T-Mobile's favor."
T-Mobile did say Wednesday that it is quickly ramping up its LTE coverage in the U.S., which has been significantly behind the other carriers' networks. Now 157 million people in 116 metropolitan areas have access to T-Mobile's higher-speed network.
"From a marketing perspective, Verizon Wireless still owns the 'best network' message. AT&T is promoting the speed of its LTE network; we'll see how T-Mobile compares, but regardless, consumers see T-Mobile as a challenger brand, not the leader," Greengart said.
Still, Legere feels the company is shaking up an entire broken industry. "The list of what they have to respond to is getting really long," he said.
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