NEW YORK -- T-Mobile announced a new device upgrade program for its no-contract customers Wednesday. The program allows these customers to get their hands on the latest and greatest phones at subsidized prices.
The upgrade program, called Jump, makes it easier for people to upgrade to new devices and pay a lower price instead of replacing their current devices at full price. To participate in the early upgrade program, customers will pay $10 a month. Customers can get their first upgrade after being enrolled in the program for six months. The company will then credit the remaining cost of the device. Enrollment will start this Sunday.
"Two years is too long to be locked into a phone," said T-Mobile's CEO John Legere."You should decide when you upgrade, not your wireless company."
The program also works as device insurance and includes protection against malfunction, damage, or theft. Legere said that given that device insurance already costs between $8 and $12 a month, so he said the upgrade program is virtually free if you think of it that way.
Legere went on to say that the Jump program will finally allow people to upgrade when their device screen cracks or they drop their phone in the toilet.
"If your phone malfunctions or it becomes possessed," he said. "If it's stolen or you drop it in the toilet or run it over with the car. Or if you just don't like it anymore, you are covered."
Legere pointed out that the company's competitors AT&T and Verizon Wireless are actually lengthening their upgrade cycles to 24 months.
That's not what customers want," he said.
Earlier this year, T-Mobile announced new no-contract plans that require customers to buy devices at full price. Customers also can pay for devices in monthly installments. But if they leave the T-Mobile service, they must pay the full price of the device.
Some consumers complained that buying devices at full price made it more difficult to get newer devices. CNET first learned of this concept in March, when CEO John Legere said it was still an idea that the carrier was tossing around.