By Lisa Johnston
New products on display at the American International Toy Fair, held in N
New York — T-Mobile unveiled Phase 2 of its uncarrier strategy, which includes a JUMP (Just Upgrade My Phone) program that allows Simple Choice no-contract subscribers on an equipment installment payment (EIP) plan to upgrade their phone up to twice a year if they lose or break it, or if they simply want to upgrade to a new model.
The carrier said during a press event here Wednesday that Phase 3 is not far away, announced that it exceeded its midyear goal for 4G LTE expansion, and said it would be the exclusive launch partner for Sony’s water-resistant Xperia Z smartphone, which goes on sale Wednesday at $99 down plus 24 monthly payments of $20.
In what CEO John Leger called an industry first, the company also extended its Simple Choice no-contract family plan to consumers who don’t pass credit muster.
Both programs start on Sunday, but they will not be available for now through big-box retailers and some other indirect retailers, the company acknowledged. That’s because the JUMP plan is available only to consumers who sign up for T-Mobile’s installment payment plan, and for now, big-box retailers and select other indirect retailers haven’t begun offering the installment plan, chief marketing officer Mike Sievert told TWICE.
Likewise, the no-credit-check Simple Choice family plans are available only to subscribers of T-Mobile’s no-contract Simple Choice plans, and for now, big-box retailers and select other indirect retailers haven’t begun selling those plans. Instead, those retailers sell new Classic contract plans and new no-contract Value plans, all offering a simplified rate structure like the Simple Choice plans. The new Value plans lack an installment-payment option and require subscribers to pay the unsubsidized price of a handset up front or bring their own phone to the network.
Simple Choice plans with the installment plan are available through T-Mobile stores, independent retailers that exclusively sell T-Mobile, and other retailers, said Sievert. “The vast majority of distribution” sells Simple Choice and offers handset installment plans, he said.
Leger held out the possibility that more indirect retailers would join the majority that offer Simple Choice and the installment plan. “Where the EIP is and isn’t can change over time,” he said.
The new family plan is targeted to the third of U.S. families who “are boxed out” of other national carriers’ family plans because of their credit rating, and these families “probably could benefit the most” from family plan savings, Leger said. Family-plan subscribers who do not undergo a credit check will pay the same monthly rates as subscribers who pass credit checks, Leger said. Families who don’t undergo a credit check, however, must pay for a month’s service in advance.
The new JUMP program works like this: Consumers pay $10/per month for the privilege to change phones, and within six months of signing up, users can change phones purchased on an installment plan twice within a year’s time. The $10/month includes handset insurance, which Leger said usually costs as much as $8/month.
Consumers switching phones under the program will never be charged more for a phone than new subscribers, and subscribers will be fully credited for the unpaid portion of their installment plan at the time they turn in their existing phone, Leger said. If the turned-in phone is not working, shows signs of water damage, or has a cracked screen, users will pay an insurance deductible that runs anywhere from $20 to $170.
T-Mobile will recoup much of the value of phones returned under the JUMP program by refurbishing and selling the devices, including selling the devices to subscribers who want more affordable handset options, said Sievert.
As for T-Mobile’s LTE rollout, chief technology officer Neville Ray said the company exceeded its goal of turning on LTE in markets reaching 100 million subscribers by mid-2013. As of July 1, he said, LTE was operating in 116 markets, reaching 157 million people, and the company promised to exceed its goal of expanding service to 200 million people by year’s end. LTE will be available to those 200 million people “way before the end of the year,” he said.
The carrier’s LTE footprint includes 73 of the top 100 markets, whereas Sprint’s LTE network is available only in 22 of the top 100 markets, Ray said.
T-Mobile’s LTE rollout is a striking achievement, he said, because the build-out started only at the end of 2012. The build-out pace exceeds the pace at which Verizon, AT&T, and Sprint have rolled out LTE, he said. Verizon started rolling out LTE in 2009, followed by AT&T in early 2010 and Sprint in late 2010, he pointed out.
In its LTE markets, T-Mobile’s average download speeds run from 10Mbps to 20Mbps, exceeding Verizon and AT&T speeds of 5Mbps to 12Mbps and Sprint speeds of 5Mbps, Ray said. In part, T-Mobile’s high speeds are due to fewer subscribers using its network compared to AT&T’s and Verizon’s network, Ray admitted, but he said T-Mobile can maintain its speed lead as it adds subscribers because it is adding LTE spectrum gained through its MetroPCS acquisition and through refarming its 2G spectrum to 3G and 4G use.
Other network improvements have increased in-building coverage by 20 percent in some markets, he added.
In the past 18 months, the company has also expanded its 4G HSPA+42 coverage to 300 markets, and in many markets, HSPA+42 speeds outperform Verizon and AT&T LTE speeds, he said.
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