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T-Mobile’s new Jump plan gives customers a new phone every few months

T-Mobile CEO John Legere gestures as he speaks during a news conference in March at which T-Mobile announced it would start selling the iPhone 5. Legere has been pushing T-Mobile away from industry standards.
T-Mobile CEO John Legere gestures as he speaks during a news conference in March at which T-Mobile announced it would start selling the iPhone 5. Legere has been pushing T-Mobile away from industry standards.
(Mary Altaffer / AP)
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This story has been updated. See the note below for details.

Want a new smartphone every few months for a fairly low price?

T-Mobile’s making it possible. Although Verizon and AT&T recently lengthened the amount of time that subscribers have to wait before upgrading their phones at discounted prices, T-Mobile is moving in the opposite direction.

The fourth-largest cellphone service provider in the U.S. announced Wednesday that subscribers who pay a $10 monthly fee and trade in their phones can now potentially get four new phones in a 24-month period.

Customers can enroll in the plan starting Sunday. New enrollees must wait six months to make the first upgrade.

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In other words, a customer who buys a Samsung Galaxy S4 on Sunday will pay $100 upfront and then $20 a month for 24 months for the phone. Bump that to $30 a month, and the customer could get a new phone in January and then get one more new phone before January 2015.

Money still owed to pay off the old phone is waived. That’s potentially four phones in 18 months for about $900, or about $50 a month.

The $10 monthly fee includes T-Mobile’s premium insurance plan, which covers theft, loss or damage. That premium protection plan normally costs $8 by itself.

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As T-Mobile put it, customers are covered if they are just tired of a phone.

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This is the second big change T-Mobile has made to cellphone contracts this year. It previously stopped offering discounted phones when subscribers sign a new contract. Instead, customers pay the full price of a phone – often as high as $650 instead of the subsidized price of $250. But in exchange, T-Mobile offers lower rates and spreads out the cost of the phone by turning it into a monthly fee.

That change allowed T-Mobile to create this new upgrade program, which will be known as Jump.

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“We’re going to remake a stupid, broken and arrogant industry,” T-Mobile Chief Executive John Legere said.

The phone being traded in must “be in good working order” with “no liquid damage, no broken or cracked screens, and the device must power on.” If it’s not in good working order, the customer must pay a fee that would range from a few dollars to about $150.

The company had a few other announcements Wednesday. T-Mobile’s LTE coverage, a faster form of cell phone, now reaches about half of the U.S. population. The faster coverage is available in cities such as Los Angeles, New York, San Francisco, Chicago, Boston, Philadelphia, Dallas, Seattle, Atlanta and Miami.

T-Mobile also announced that it would no longer require credit checks for family plans. It’s offering a four-line plan with unlimited talk and text for $100 a month. Each phone would get 500 megabytes of high-speed data.

[Updated, 4:15 p.m. PDT July 10: T-Mobile Vice President Gabriel Torres offered several additional details in a call late Wednesday.

--Existing T-Mobile customers can join Jump for a limited time if they are buying their phone under an installment plan.

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--Existing post-paid customers can switch to an installment plan near the end of their two-year contract or pay a variable migration fee to switch immediately.

--The initial upgrade counts as one of the two upgrades that is allowed every 12 months.

--People joining the new $100-a-month family plan without a credit check can bring their own device or buy one for full price. However, T-Mobile may have a good supply of cheaper, refurbished phones because of the Jump trade-ins.

--Insurance through Jump applies to the device, not the line. Slightly more than half of customers buy insurance. Among smartphone buyers, it’s closer to 65%.

--People still have the option of paying the full price of a phone upfront and then switching phones any time without a fee.

--In Los Angeles, 4G LTE coverage should be available across the region, including Burbank, Culver City, Encino, Van Nuys and El Segundo. Speeds should be 15 to 20 megabytes per second.]

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