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Is T-Mobile’s new upgrade program Jump worth it?

While I wouldn’t exactly call it T-Mobile’s “boldest” move yet, the self-styled “Uncarrier” did announce a new change in strategy at its media event on Wednesday. T-Mobile(s tmus) wants to make it easier for customers to upgrade their phones, not on the typical one-year or two-year cadence common to the mobile industry, but every six months.

Technically under T-Mobile’s current no-contract plans you can upgrade whenever you want — you just have to finish paying off your current device. T-Mobile’s new Jump program, however, will forgive all of your financing payments and let you start afresh with a new device and a new financing plan. The catch? It requires a $10 a month fee and your old phone needs to be in reasonable shape so you can trade it in. If the phone’s busted, there’s a deductible — running anywhere from $20 to $70 — before you can upgrade.


So is it worth it?

It depends on what kind of mobile user you are. If you’re one of those people who absolutely must have the newest phone whenever it launches, Jump could meet your needs quite niftily. Say you buy an iPhone 5 today, but want to upgrade to whatever new iPhone Apple(s aapl) releases six months from now.

To get the initial iPhone 5 you pay $150 down and then make six months worth of $20 installment payments and six months of $10 Jump payments. That’s $330, pretty much half the cost of the 16 GB device. You can then trade in that iPhone 5 and get the newer iPhone on whatever financing plan T-Mobile then offers. You’re not getting a discount on the new phone, but T-Mobile wipes the slate clean. It’s like starting all over again as a new customer.

Of course, you’ve just put $330 toward a phone you’ll never see again. You can’t give it to your kids, your boyfriend or your mother, and you can’t sell it on eBay(s ebay) or trade it to your drinking buddy Bob for his ant farm. Assuming T-Mobile keeps the same financing plans in place, you’ll then spend $150 for the new iPhone, and at the end of another six months, when a new upgrade kicks in, you’ll have spent another $330. That’s $660 in hardware payments in one year – basically the cost of a single high-end smartphone.

Rent or own?

You can think of Jump like you would renting a home versus buying one. If you view your phone as an investment, then Jump might not sit well with you. But if you think of the phone as merely a vessel for your mobile lifestyle — as a growing number of Americans do — and always want access to the latest and greatest vessels, then Jump is right up your alley. It will cost you, but only half as much as it normally would to buy a brand new smartphone every six months.

T-Mobile media event If you don’t want to upgrade every six or eight months, though, then the returns on Jump diminish. Say you want to get the newest version of the Galaxy every year: Over 12 months, you’ll have found yourself putting $460 toward your old phone only to lose it when you upgrade. Since the total cost of a Galaxy S 4 is $580 at T-Mobile, you’ve pretty much already bought the phone, yet you don’t get any value out of trading it in or selling it. If your upgrade cycle is 18 months are longer, you’re probably just throwing money away.

Of course, you can always think of Jump as insurance, which is not a bad way to approach the program. I managed to stick my iPhone 5 in the washer within three months of buying it, and as T-Mobile CEO John Legere pointed out there are a lot of people walking around with fairly new phones they’ve managed to crack, jam or otherwise wreck. Still, if insurance is all you’re after, there are cheaper plans than $10 a month. If you’re looking for a combo of upgrade flexibility and insurance though, then Jump is worth a look.

But I can get a new iPhone for $200…

For a lot of people, these prices aren’t going to seem fair no matter how you look at them. We’ve been conditioned for so long to think of smartphones as throwaway electronics that should cost no more than $200. But that’s because we’ve all been fooled by carrier subsidies. We’re still paying the full cost — if not more — for our devices, we’re just doing it through our monthly bills, which is why we get locked down to two-year contracts.

T-Mobile store logoT-Mobile charges far cheaper rates than the other carriers, and it does so because it separates out the cost of the device from the service plan. It’s a pretty revolutionary way of selling mobile devices and services, at least for the U.S., but it’s going to take some time for Americans to get used to it.

That’s what I think is most significant about Jump. The cost economics of the program can go either way depending on what kind of consumer you are, but T-Mobile is trying to shake up the subsidy-contract contract structure.

Let’s face it: any two-year old smartphone is ancient. Requiring 24 months of service before upgrading is a bit silly. We may have to change the way we think about phone pricing, but at least Jump gives us an alternative.

T-Mobile store image courtesy of Flickr user swruler9284

25 Responses to “Is T-Mobile’s new upgrade program Jump worth it?”

  1. victoriamorgan97

    It’s almost certainly honest to express in which Jump has been just not always much better than your additional options for improving your cell phone it can be just as diverse. Should you be self-confident you can leverage the program double annually, each year, it can be value looking into. Should you be the amount of person who wants to have got improved independence minus the headache regarding advertising employed devices.
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  2. its actually 30$ total 20 for the “renting” and 10 for the jump so if your bill is 50 then its 80 which is still less than sprint and just like buying a phone with metro pcs (which is owned by tmobile to )

  3. hI i have a question im going to t mobile to pay 145 with my excellent credit how does it work a month how much would my phone bill be a month please answer

  4. Guglielmo Marconi

    One element that may lack emphasis, a customer on jump, or any alternative installment plan has the option to pay off the installment in full with no particular penalty. If a buyer is found that is willing to pay an amount above that which remains for the installment, which seems likely as most phones will not depreciate nearly as rapidly as the monthly payments are made.

    If one assumes that jump is not used, the cost for most devices on t-mobile for the device itself is 240 per year; yet most phones should be able to command at least half of their value at that time, and considering the down payments, there is no reason to restrict oneself only to the t-mobile options of trading the device in and beginning the cycle anew, a third party should pay more than enough to address the current price of the device owed to t-mobile.

    Including initial payments of approximately $150 for the down payment, and $120 for the device after six months implies that a new smartphone has depreciated by well over 1/3 in the first six months of ownership; a very dubious proposition if one simply planned to trade the device in to t-mobile, assuming the phone has not been subject to abuse.

    Factoring jump into the equation, the economics for the customer are even less spectacular. Admittedly the insurance element is a complicating factor, but if t-mobile was overly concerned about widespread damage to devices, the deductibles would be higher, or the monthly fee would be greater.

    I am in favor of providing alternative options for consumers for devices, but ultimately I am far more concerned with the ability to achieve markedly lower rates for data service. Every carrier thus far has at least hinted at VOIP, which is also more than up to the task of standard messaging, and with better data rates, reduced latency and jitter, even video telephony. Having a newer device, with 9 different payment plans is to me far less revolutionary than rates which allow for more expansive data consumption at high throughput, reliability, and geographic range.

    Ultimately, I don’t see t-mobile, or any other carrier planning to drastically change data rates, as the ability to generate revenue and profits would seem fundamental to the companies future plans. There is nothing to stop me from using a credit card with 0% for 12 or 18 months to purchase the phone, and have a perfectly decent device, with high trade in potential or sale price. True innovation would be geared more towards data only smart phone plans, with elements like voice over ip, increased wifi calling functionality, no requirements for seldom used voice (which practically any carrier will now provided in “unlimited since you barely use them” amounts. Unfortunately, even for the revolutionaries in pink, that is still a bridge too far.

  5. riopato

    I would take advantage of this plan if it weren’t for the fact that T-Mobile’s selection of phones is awful. Interestingly though every time T-Mobile does come out with a phone I would be interested in, my contract would be close to renewal.

  6. NexusUser

    So like many have discovered, the 10$ fee includes insurance, which for my phone was 7.99. Ok so why not do the math that way?

    2$ x 6 months = 12$
    20$ x 6 months = 120$
    down payment = 99$
    Taxes = 70$ roughly??

    Total spent on owning this phone when ready to trade in = 300$
    If i look online right now to sell my phone (Nexus4) i would probably get 250$.
    That would just pay off the rest of my “loan” so I really am not out of any money.

    Mind you, I understand I could have bought the Nexus 4 from Google directly for 349$, But i did not, I went through T Mobile, which means it cost over 500$. So this example may not work in some people’s mind as they will be stuck on the 349$ price line. But it is my situation lol..

    I feel, there is not much money “lost” in this program, if it is used. I my self, like new things. I have numerous times, bought a phone, then within 6 months got another.

    I think this is a great step in the right direction.

  7. Hi, I just had a quick question and if anyone can clear it up for me, it would be greatly appreciated! If I signed up for T-Mobile plus this “JUMP!” service and lets say I bought an iPhone 5, six months down the line I want to get a new iPhone 5S or whatever it’ll be called, but I went and sold my iPhone 5 beforehand and am using a temporary “throw-away” to wait for the new “5S”. What would happen if I couldn’t provide that trade-in of my previously bought iPhone 5? Anyone have an idea of what I’d be paying to get that “new iPhone”?

    • Kevin Fitchard

      Hi Felix,

      That won’t work. In order to take advantage of Jump you have to provide a working trade-in or even a broken phone. It’s an upgrade program, not a new phone discount.

    • S.u. Santana

      Well, you can just pay the remaining balance due on the phone. If you can work in the additional $300 into your budget within 6 months you can keep the phone, no need to trade it in.(Case scenario:Buying a phone with the average $600 retail price point with a $300 down payment) The $10 Jump/Insurance plan does not sound that bad an idea. The added surety that your phone is covered, even though the deductible is a little unreasonable at $175 and you’re not guaranteed a “NEW” phone, still is better than paying full price. If tmobile truly does eliminate any and all ETF fees, it’s great. The major eye catching selling point is the unlimited plans, with verizon and at&t charging an arm, leg and liver for 4gb of service than a left testicle for any overages, unlimited services is a Godsend. Sprint proved what the power of unlimited can do, only problem with the “NOW” network is that their truly unlimited services is “NOT RIGHT NOW”

  8. People keep thinking it’s not worth it because you’re “giving back your phone”. It’s not a rental. You are buying a phone, then selling it when you want to get a new phone.

    You want a GS4, which costs $580. You give Tmobile $100 and owe Tmobile $480. 6 months later, you’ve paid $120 in device payments and you owe Tmobile $360.

    JUMP gives you a guaranteed sell price, and an alternative to selling it on Ebay/Craigslist/Swappa. That’s all.

    • You have to include the additional cost of the jump plan in these figures which is 6 months x $10. Add $60 to cost paid for device with these options. It becomes $280 paid over 6months…then you upgrade with another down payment along with equipment monthly payments and jump plan costs. This is $560 per year never having a paid off phone…but with the perks of having the newest equipment. Does the technology change enough in 6 months to justify the cost? Probably not. The longer you go without trading up beyond 6 months, the less sense this plan makes.

  9. Timezones

    This is basically like leasing a car. They require some sort of small down payment, then monthly payments until you trade it in for something new. Ideally they’d offer a $5 option that lets you upgrade once every 12 months.

    • TinkerBellsBaby

      The $10 price includes insurance though- so you’re really only paying what, $2 a month for the freedom to upgrade when you want!?! NO BRAINER!!

    • TinkerBellsBaby

      $10 price for JUMP includes insurance though. So you’re basically paying what- $2 a month for the freedom to upgrade when you want?!?! Um- it’s no-brainer to me!

  10. Nathan

    Ive asked around and had no luck with this question, Will this be available for current customers? They said something about this in the press event but didnt give any details.

        • James Balster

          I enrolled by just removing my insurance and adding jump in services. That was it. I’m on a Galaxy s2. I’d like to upgrade. I don’t mind trading in a phone. i’d do it twice a year.

  11. Simply put: You start an account with T-Mobile with an iPhone 5, let’s say, with the $99 down and 24 installments of $20 added to your bill.

    THEN the iPhone 6 comes out in a year. All you have to pay is the $99 down (let’s say) the iPhone 6 costs and your $20 for 24 just resets itself from that point. The only catch is that you have to give back your old phone. Your bill stays EXACTLY the same. This is really revolutionary stuff considering a contract price on the same phone anywhere else is a lot MORE expensive than the down payment price T-Mobile charges while att/verizon may not even give you that pricing until your two years are up.

    I think the problem is people tend to confuse themselves and think too much about the phone payment aspect of it. They are completely interest/finance charge free. A lot of people pay for insurance anyway and JUMP includes that already.

    I agree though that two phones a year are excess for most people but once every two years is definitely too LONG for most people as well. This is great for Apple users who can move into the latest iPhone just by giving their old ones up. They don’t have to ‘generation skip’ and that’s the demographic this should really catch on with.

    • Good point if the deal includes insurance–I’d not noticed that.

      As to the churning of phones, I think that might slow as phones become more capable, just as the need to upgrade desktop computers slowed. Look how many S3 owners don’t think that the hardware of the S4 offers that much more.

  12. There aren’t enough advancements in six months to make it worth while. I’m actually impressed how easy it is to switch from one Android phone to another, but I wouldn’t want to do it even once a year.

    • Kevin Fitchard

      Hi Kary,

      I agree. I have barely figured out all of the features in my phone after only six months. I don’t think I would be a very good candidate for Jump, but I definitely see how some people might be.

  13. William

    Have to differ with you on not getting ANY value on your smartphone by trading it in or selling it after 12 months. Just sold my Galaxy S3 on for $250 after using it for over a year.

    • Kevin Fitchard

      Hi William,

      I think you misunderstood, or I just wasn’t clear enough. You don’t get any value out of the phone because T-Mo doesn’t let you keep it as part of the Jump program. I agree with 6-12 month old high-end smartphone still has a lot of value if it’s in good shape. That’s why I’m saying the returns diminish on Jump the longer you don’t upgrade. You’re paying off a phone you don’t get to keep.