T-Mobile(NASDAQ:TMUS) press conferences never fail to deliver.
While many companies have succeeded in pumping up these events, T-Mobile drops a bomb every time it announces something new. That is driven by its CEO John Legere who mixes savvy business acumen with the skill of a good carnie. He is part Jack Welch, part Bobby "The Brain" Heenan, and he never fails to deliver.
The company continued that track record with what it called "Un-carrier" Amped, updates to its well-known series of special offerings. The first of those, a revamp of the JUMP! program, makes it easier for customers to trade in their devices more often with no penalties.
How it works
T-Mobile, unlike rivals AT&T, Verizon, and Sprint, does not offer subsidized phones. Instead, customers can either pay the full price of the device upfront or split it into 24 monthly installments. JUMP! allows people on the installment plan to turn in their device and swap it for a new one at no extra cost. If, for example, you tire of your Apple iPhone 6 and want to exchange it for a Samsung Galaxy S6, you can do so without penalty.
Under the old JUMP! program, customers paid $10 a month for device insurance and the right to swap phones once every six months and after paying off 50% of their phone. The new plan, dubbed JUMP! On Demand, has no fees and allows for switching devices up to three times a year. It does not include device insurance, which can be purchased for an additional $8 a month.
"While the carriers are breaking every promise they've ever made with their knock-off upgrade programs, we're racing full speed ahead, making one of our most popular moves even better," said Legere in a press release. "JUMP! On Demand is the best way to get a new smartphone whenever you want. Zero out the door. Zero at upgrade. Zero fees. Zero wait. Zero BS."
Why does this matter?
Under the model used by all of the other carriers, contracted customers can only upgrade their phone about once every two years. There are exceptions and alternative offers, but that is the traditional cycle for upgrades. Under that model, a devoted Apple fan would miss the annual iPhone release every other year unless he or she paid off his phone or just shelled out full retail for the new one.
T-Mobile said in its press release that "nearly half of Americans say they wish their carrier would let them upgrade their smartphone more often," though it did not cite a data source for that statistic. With JUMP! On Demand, customers could get a new phone up to six times in a two-year period.
It is important to note that getting a new device through JUMP! resets the clock on paying off your phone. If, for example, you have paid off three months of the 24-month payment plan, and you elect to turn it in for something new, you are back to month one.
Still, over 10 million people have used JUMP!, according to T-Mobile, upgrading their phones 30% faster than everyone else -- every 14 months compared to the industry average of nearly 20 months.
Follow the leader?
Legere delights in pointing out the less-than-friendly practices of some of his competitors. In this case, he noted that while Verizon offered an early upgrade program, the company has quietly tweaked it to make it less attractive. He correctly noted that the carrier had originally required customers to pay off 50% of their device before they could upgrade, which they increased to 75%, then 100%.
"Verizon's quietly turned their 'early upgrade' program back into a two-year contract -- as if nobody'll notice. And AT&T isn't much better. These guys just don't get it," added Legere. "Customers want more flexibility and freedom not less. So, while they make you wait longer and pay more, we're changing the game again with JUMP! On Demand."
This is a pretty good deal
While it may not appeal to people hoping to pay their phone off quickly, JUMP! On Demand definitely serves a niche. Many phone customers simply go from one subsidized phone to the next every two years paying for that subsidy in higher monthly bills.
For those people, this new program gives them the opportunity to have the latest and greatest phone as often as they want it. It is an innovative offer for subscribers who are pretty much always making an installment payment on a device anyway. Now, they will keep doing that with the benefit of their preferred device.
Editor's note: Details about the swapping of phones under the old JUMP! program and fees for the new JUMP! On Demand program have been updated in this article.
Daniel Kline owns shares of Apple. He likes having the latest phone but generally steal his wife's upgrade. The Motley Fool recommends Apple and Verizon Communications. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.