UPGRADE COSTS VERSUS TWO-YEAR PLANS IF YOU CANCEL EARLY
- Remember that $10 out of the monthly payment goes to JUMP!, and is not part of the EIP, given those payments together, if you cancel early, you end up with out-of-pocket expenses that are higher than retail for the equipment itself.
This is not really a level comparison, but for those that are not sure they will be able to stay with a particular carrier for a long time it is worth taking note. If upgrading your equipment is secondary to out-of-pocket expense, the subsidized options do indeed shine, even if you had to cut the relationship short for some reason. Another factor to consider is that retail prices are moveable goal posts. When we compiled the costs of JUMP! just last week, the listed retail price of a Samsung Galaxy S4 on T-Mobile’s website was only $579.99. Now it lists for $629.99. That is not to say the same thing does not happen with subsidized prices. When you factor in real-life variables about whether someone realistically thinks they will be able to stay with a specific provider for a set period of time, T-Mobile has removed itself from being an appealing option in that instance (which is not a bad business decision).
Another factor about JUMP! is that if you cancel early, the final out-of-pocket expense is higher, and it gets even higher if you were to cancel at say twelve months instead of six because of the required $10 monthly equipment coverage. We are not disputing the value proposition of protecting equipment that is ultimately going to be traded in, but if you canceled at twelve months, your total out of pocket expense for any device is going to be $120 more than retail. If you upgrade every six months, add another down payment to the bottom line.
For purposes of this comparison, AT&T does show some value with its subsidized plan because its initial ETF is $325, reduced $10 per month of service. Verizon starts at $350, reduced $10 per month as well. Those terms work well in favor of your pocketbook versus full retail prices.