It’s no secret that sales of flagship phones like the Samsung Galaxy S4, HTC One and iPhone 5 have failed to impress investors thus far. In fact, some say the smartphone market has peaked. But a lack of innovation isn’t the problem. It’s that consumers can’t act on their desire to have the latest and greatest because they’re locked into two-year contracts. What T-Mobile has done with its new Jump plan is obliterate this obstacle while finally giving AT&T, Sprint and Verizon subscribers real incentive to jump ship.
The new Jump service allows T-Mobile customers to upgrade up to a new handset twice per year, provided they pay $10 per month. With AT&T and Verizon Wireless, you have to wait a full 24 months to upgrade, which is an eternity in the wireless world. This fee also covers protection from loss, theft or damage (though there’s also a deductible).
When you’re ready to upgrade with Jump, you trade in your existing phone and, provided it’s in good condition, pay the same up-front cost as if you were a new T-Mobile subscriber. So, for example, you’d pay $99 to get the HTC One and continue paying $20 per month for the hardware as part of the carrier’s Simple Choice Plan. T-Mobile can do this because in March it wisely decided to separate the cost of the device from its service.
Does adding $10 to your existing wireless bill nullify the advantages of T-Mobile’s low-cost data plans? Not really. If you were to purchase a Galaxy S4 for $99 down and pay $60 per month for unlimited talk and text and 2.5GB of data, you would wind up paying a total of $90 per month when you add in Jump and the device cost per month, compared to $100 per month for Verizon’s 2GB Mobile Share plan. AT&T charges $85 per month for unlimited talk, text and 1GB of data and $110 for 4GB. (However, you can save if you opt for the $69.99 3GB Individual plan with 450 voice minutes.)
To me, having the freedom to upgrade to a new device is definitely worth the added expense. In fact, I wouldn’t be surprised to see T-Mobile leapfrog Sprint in short order in terms of smartphone sales. Although you can save money by trading in your old phone on Sprint, the carrier doesn’t offer the same flexibility in upgrading, and its prices are higher. You’ll pay $110 per month for unlimited talk, text and web or $79 if you’re willing to live with 450 voice minutes. For just $10 more on T-Mobile, you can upgrade your phone whenever you want and talk as long as you want.
T-Mobile also just surpassed Sprint in terms of 4G LTE markets, with the former covering 116 markets to 110 for Sprint. The carrier’s CTO claims that T-Mobile now covers 73 of the top 100 U.S. markets, compared to a measly 22 for Sprint. And we believe it, based on the spotty Sprint LTE reception we get in the still-not-officially-launched New York City.
In my early tests of an LTE-capable T-Mobile HTC One, I’ve been fairly impressed with the performance. At its best, downloads ranged from 11 to 16 Mbps in areas of New York City and New Jersey. And uploads were between 9 to 10 Mbps. Those are good numbers. In fact, I got an LTE signal all the way down to Woodbridge, NJ.
Outside of LTE range I saw downloads in the 4 to 8 Mbps on T-Mobile’s HSPA+ network, which is far better than the fallback speeds you’ll see on Sprint’s 3G CDMA or even AT&T’s HSPA+ networks. Uploads, however, were a paltry sub 1-Mbps.
T-Mobile says that the Jump program represents only phase two of its “un-carrier” strategy, with the next announcement to come this fall. But this move already gives the other big three carriers cause to second guess their own strategies.