Here's a new phone. In your face.On Wednesday T-Mobile revealed another scheme to pull customers away from the likes of Verizon, AT&T and other competitors. It's called "JUMP" (AKA Just Upgrade My Phone) and supposedly promises upgrades up to twice a year beginning six months after enrollment. This gimmick will cost $10 extra per month in addition to the device payment, and include protection against malfunction, damage, loss or theft.
"Simply trade in an eligible T-Mobile phone in good working condition at a participating store location," the company said. "Any remaining Equipment Installment Plan (EIP) payments will be eliminated, and current customers can purchase new phones for the same upfront pricing as new customers, with device financing and Simple Choice Plan, a no-annual-service contract."
Current customers never pay more for their new phones than new customers, the company notes. However, device pricing may vary based on approved credit.
Remember, this is the same company that was forced back in April to change the way it promoted its "un-carrier" plan. Despite T-Mobile's "no-contract" and "no restrictions" promises, the company still slaps on an early termination fee if the customer abandons ship before the two-year period is over. Even though there's no two-year contract for wireless service, there's still a two-year deal between T-Mobile and the customer over the phone, and they're left with the remaining balance of the device if they terminate coverage early.
"As Attorney General, my job is to defend consumers, ensure truth in advertising, and make sure all businesses are playing by the rules," said Washington State Attorney General Bob Ferguson. "My office identified that T-Mobile was failing to disclose a critical component of their new plan to consumers, and we acted quickly to stop this practice and protect consumers across the country from harm."
Naturally all that "un-carrier" talk about no restrictions and whatnot completely vanished. How about that.
Like its former "un-carrier" promotion, T-Mobile new "JUMP" plan sounds golden. Question is, what will consumers pay in the long run? When consumers trade their car in for a new model, they're given in credit or cash what the older car is worth which is applied to the new loan. If the customer still owes money on the older car, it usually gets tacked onto the back of the new loan. That said, what will happen when T-Mobile users turn their $600 phone in for upgrade in six months?
As previously stated, T-Mobile claims that "any remaining Equipment Installment Plan (EIP) payments will be eliminated." But what's the catch? It's difficult to believe T-Mobile will dismiss the balance owed. It already stated that customers will be required to make a payment up front on a new device, the $10 monthly subscription fee, and the actual monthly device payment. It's likely they will not be eligible for an upgrade until the current device is nearly paid off. That's where the "up to" statement comes into play.
Remember, T-Mobile provides two ways to pay for a device: in its entirety up front, or in monthly installments over two years. It's separate from the wireless plan but connected at the same time. It may be possible to pay off a device if the customer pays $200 up front for a $600 phone, then $60 per month and the $10 subscription fee. Rinse and repeat.
Unfortunately, there's likely some fine print somewhere that will require an Attorney General to pull up and call T-Mobile out on. Just give it a few months.
"We think there's a huge opportunity here that's untapped," said T-Mobile CEO John Legere. "More and more of the volume in this industry is going to big global famous brand SKUs. We're going to create a refurbished market for those devices and resell them at a lower price … these are carrier certified, open box devices that themselves qualify for Jump."