Subsidies, contracts and how the upgrade plans of T-Mobile JUMP!, AT&T Next and Verizon Edge add up

posted by Maxwell R.

Jul 19, 2013, 10:00 AM

This article may contain personal views and opinion from the author.

Subsidies, contracts and how the upgrade plans of T-Mobile JUMP!, AT&T Next and Verizon Edge add up

Just last week, we fired up the Cray supercomputers and crunched the numbers of T-Mobile’s new upgrade program called JUMP! Since then, AT&T made its announcement about a similar equipment upgrade plan called AT&T Next. Shortly thereafter, we learned about Verizon working on yet another upgrade program called Verizon Edge.

We should provide you with a caveat, there is some disagreement even amongst us, your humble writers, as to the role that equipment subsidies play in the business model and rate plans, so we have gone to great lengths to compare a number of scenarios.

The issue of subsidies and their role in rate plans will be discussed in the conclusion of this article. For these comparisons, we contrast the upgrade plans as they have been presented by the carriers. Then, we will even the markers up and look at costs if you upgrade equipment at the same interval. We also examine how things line up when you add carrier service plans to the picture. As usual, we are not incorporating taxes because they vary by location.

Unlike the variety in our initial numbers crunch with T-Mobile’s JUMP!, we are only going to address the “preferred” pricing model (that is, what is on their web-site, sans contingencies for bad credit) from T-Mobile. We will also compare costs of two models, the Samsung Galaxy S4 and Apple iPhone with 64GB of storage, two flagship devices with distinctly different price points, plus we picked a lower-priced smart device that might retail in the $400 range (like a Nexus 4). Since lower end devices are not as pervasive across all carriers, the examples will not be a price-point match, but will be relevant to those that are thinking about those devices.

We are also going to look at what it costs if you cancel service with these plans versus being on a regular two-year contract (if applicable). It should make for a very interesting comparison. Let's turn the page and see what happens.

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56 Comments

57. rick0204

Posts: 1; Member since: Jul 24, 2013

I have been with Verizon for years and have a very old plan that works for me. The plan is $60.00 per month. I needed a new phone this past weekend so I called Verizon. The rep said a discounted phone with a 2 year contract would result in my losing my old plan and I would need the new Share Everything Plan for $100 or so. I said no and went to a Tmobile store and started the Jump program with a new Samsung Galaxy 4. The total price for me on the first day was $204.00. This included the down payment, the Sim card and payment of the taxes on the full retail proce of the phone. I thought this was a great idea in the store but when I arrived home I started doing all kinds of calculations and was very uncomfortable with the Jump program. I called Verizon back and was told that there is a "Win Back" department that is only open Mon-Fri. I called on Monday and the rep said I can have my old $60.00 plan back if I agree to a 2 year contract with the Samsung Galaxy 4. The total price would be $217.49 for the phone and tax. I also added the $8.00 insurance to get the plan closer to the Jump bundle plan. If I am doing the calculations correctly here is the cost of the new phone after one year on both plans: 1. Tmobile Jump - $564.00. This includes the $204.00 for the new phone, $60.00 x 12 = $360.00 (phone charge + jump charge). 2. Verizon - $543.00. This includes the $217.49 for the phone, $96.00 insurance and $230.00 ETF. In both cases I can get another new phone and start over. With Tmobile it will cost me $204.00 if the down payment is the same and with Verizon it will cost me $217.49 if the discounted phone is the same price. My new Verizon Samsung Galaxy 4 arrived today and i am porting my number back and returning the Tmobile device tomorrow. I will only have to pay for 5 days of service with Tmobile. In doing my research I also found out the the deductible with the Tmobile replacement part of Jump is $175.00. With Verizon the deductible for a replacement device is $99.00. This is not an upgrade but a replacement if your device is lost, stolen or damaged. I think the Tmobile Jump program will only work if you upgrade every 6 months no matter what. If you do then you get a new phone every 6 months and the cost for each new phone will be $384.00. I think Tmobile is hoping that the customers will be lazy and not upgrade every 6 months. I was also uncomfortable paying sales tax on the full retail price of the phone at Tmobile on the first day. If I upgrade after 6 months do i get a refund of the sales tax on the remaining balance? Probably not and I would be charged sales tax on the full retail price of the upgraded device also. I hope my calculations are correct.

posted on Jul 24, 2013, 2:16 PM 0

53. networkdood

Posts: 6330; Member since: Mar 31, 2010

Bottom line is monthly prices. Take four smartphone lines for a family. T-Mobile has them for 100.00, 500MB data each, talk and text unl. Add 10.00 per line for 2GB each, giving you 140.00/mnth. 180.00/month for all lines unl data, but, I am sure not everyone needs the highest plan. ATT has two price options: Family talk and Family shared data. 4 smart phones with 700 min share talk and unl text with 300 mb data each is 100+30+80=210.00. 3GB each would cost 250.00. Option 2 family data share is 6GB at 230.00 for 4 lines. 90 for data and 140.00 for the phones, talk and text unl. Version share plan is 220.00 for 4GB and 230.00 for 6 GB. T mobile looks to be the best, but the question remains for each person - coverage.

posted on Jul 21, 2013, 11:18 AM 0

46. CSM201

Posts: 3; Member since: Sep 14, 2012

The article is incorrect about a "down payment" with AT&T. You pay nothing up front with AT&T Next, nothing down. 1st payment is applied to the following bill

posted on Jul 20, 2013, 11:43 AM 0

47. Maxwell.R

Posts: 218; Member since: Sep 20, 2012

Added correction.

posted on Jul 20, 2013, 12:49 PM 0

42. scsa852k

Posts: 331; Member since: Oct 16, 2012

You only owe T-Mo the balance of the phone when you cancel. "if you canceled at twelve months, your total out of pocket expense for any device is going to be $120 more than retail." This statement is completely false.

posted on Jul 19, 2013, 7:41 PM 0

45. Maxwell.R

Posts: 218; Member since: Sep 20, 2012

It is completely true since the JUMP! plan carries a $10 per month equipment protection charge. That money is already out of pocket if the customer were to cancel 12 months into a 24 month payment plan. At that time, the remaining retail cost of the phone is due, and $10 per month in equipment protection will have already been paid as part of the JUMP! plan.

posted on Jul 19, 2013, 11:20 PM 0

39. Jyakotu

Posts: 868; Member since: Dec 12, 2008

Honestly, at this point, if I were to leave my Sprint family plan, I would just go prepaid and be done with it. T-Mobile has changed the mobile landscape, which is fine, but pure prepaid just seems to be the simpliest method right now. Buy the phone full price, put in a SIM card, and you're good to go. And if you want to "upgrade", just sell the old phone to pay towards the new one. Simple. Easy. Done.

posted on Jul 19, 2013, 3:17 PM 0

50. lolrus

Posts: 29; Member since: May 18, 2013

A lot of prepaid plans don't have LTE though, which is a dealbreaker for me.

posted on Jul 20, 2013, 4:53 PM 0

56. Jyakotu

Posts: 868; Member since: Dec 12, 2008

AT&T now offers LTE with GoPhone. $60 for unlimited talk/text and 2GB of LTE data + $10 for additional data if you need it. Sounds good to me.

posted on Jul 22, 2013, 10:10 PM 0

37. dt3384

Posts: 1; Member since: Jul 19, 2013

one major misinterpretation of the T-mobile Jump program on these charts is that it should have been calculated with a value of $2 instead of $10 because the true breakdown of the bundled insurance package is $8(ins)+$2(jump) for total of $10 p/month. customers have the choice to opt-in to insurance only or the bundled jump feature, it is not a requirement by any means. Therefore it is not a fair assessment to calculate and additional $8 p/mo for Tmo because obviously the numbers will be inflated because then you would have to calculate the cost of vzw and att insurance cost into this equations. Other than this one misstep this was a very informative peace that breaks down cost very effective so kudos for that.

posted on Jul 19, 2013, 12:45 PM 0

38. Maxwell.R

Posts: 218; Member since: Sep 20, 2012

There is nothing in the fine print on T-Mobile's website to substantiate what you said. PHP is available as a standalone feature for $8/month, but that does not mean JUMP! is only $2/month. For JUMP!, the required out-of-pocket expense to the customer is $10/month.

posted on Jul 19, 2013, 1:43 PM 0

36. kcwirelessrep

Posts: 1; Member since: Jul 19, 2013

I have been in wireless sales 7 years and find the plans slightly hard to follow and seem like your paying way to much for the device in most cases it would be cheaper to buy the device out right and trade in or sale your old device

posted on Jul 19, 2013, 12:34 PM 0

33. ibap

Posts: 873; Member since: Sep 09, 2009

All of these schemes seem designed to confuse customers. "If you can't dazzle 'em with brilliance, baffle 'em with bullsh*t."

posted on Jul 19, 2013, 12:00 PM 2

29. aliam223

Posts: 2; Member since: Jul 19, 2013

Sprint...You need to get your version of this plan!!!!!!!!!!!

posted on Jul 19, 2013, 11:25 AM 0

35. ZeroCide

Posts: 819; Member since: Jan 09, 2013

No they don't, These plans all seem to be a big scam that the consumers pay for and the carrier benifit greatly. The Att and Verizon seem to be the biggest scam while the t mobile one is slightly less. Sprint is fine with the plans they have.

posted on Jul 19, 2013, 12:24 PM 1

25. roscuthiii

Posts: 2383; Member since: Jul 18, 2010

Didn't someone from Verizon already admit their Edge plan isn't a good deal??? Kind of all I need to know.

posted on Jul 19, 2013, 11:13 AM 1

32. lolrus

Posts: 29; Member since: May 18, 2013

The plan faced a lot of criticism and their official PR response was something along the lines of "yeah, it's not great for everyone but we're giving you more options- that's good, right?" Which is good. Unless they get rid of the old two year contract structure that is (imo) way better for the customer, at least in Verizon's case. I posted this a bit higher, but I think T-Mobile's new early upgrade plan is the only one of the three worth considering.

posted on Jul 19, 2013, 11:46 AM 0

24. joey18

Posts: 698; Member since: Jul 20, 2010

20 more on verizon thast sucks

posted on Jul 19, 2013, 11:05 AM 0

15. lolrus

Posts: 29; Member since: May 18, 2013

You're missing some information. What a lot of writers seem to not know (I've been seeing this absent from a lot of articles lately) is that you can still get a subsidized phone on a two year contract through T-Mobile at a third party retailer. I happen to work at such a retailer, and have the brochure for their "classic" plan in my hand (that is to say, the two year contract plan). 2GB plan, unlimited talk/text is $80 on a two year contract, versus $60 with the value plan. Interestingly, they kept their old ETF structure of $200 if you cancel in the first 18 months, $100 19-23 months, and $50 in the last thirty days. As far as I know, at least Staples (where I work) and Best Buy have the classic plans still with T-Mobile. The low ETF of $200 even if you cancel three weeks after you sign the contract makes this info very relevant for this article. The up-front cost of the phone is higher than it is with the value plan, but still competitive with the other carriers. For example, I have the GS3 for $50 and the GS4 for $200 on a two year contract with T-Mobile.

posted on Jul 19, 2013, 10:38 AM 2

17. Maxwell.R

Posts: 218; Member since: Sep 20, 2012

Indirect retailers also have a host of other terms and conditions when you buy from them and we simply cannot investigate every retail option when buying a device. Even with Staples (or Best Buy or wherever) locations, a carrier's core T&Cs remain.

posted on Jul 19, 2013, 10:40 AM 0

21. lolrus

Posts: 29; Member since: May 18, 2013

You're absolutely correct. For example, Staples institutes a second ETF if you cancel within six months. This is because Staples up fronts the cost of the phone and gets paid back by the carrier for that signature after six months. But, in the context of this article, where we are looking at upgrading after six months, if you cancel on the 181st day, you are off the hook for that second ETF and just pay the $200 to T-Mobile for cancelling. In which case you've paid $370 for a GS3 or $520 for a GS4 (phone+ETF+$20x6 months higher cost for plan), owned it for six months, and can probably get a large percentage back on ebay or craiglist for the phone because it's still relatively fresh. Rinse and repeat. Seems pretty good to me, if you like to upgrade often.

posted on Jul 19, 2013, 10:51 AM 0

48. Maxwell.R

Posts: 218; Member since: Sep 20, 2012

That is not universal though, many indirect channels have their own ETFs tied to whatever carrier plans are in place.

posted on Jul 20, 2013, 1:51 PM 0

20. Whateverman

Posts: 3295; Member since: May 17, 2009

That is the case for existing customers, but new customers can't get a device through third party. Or at least that's what the said when I tried to get come to T Mobile through Best buy.

posted on Jul 19, 2013, 10:48 AM 0

22. lolrus

Posts: 29; Member since: May 18, 2013

I know for a fact that I can do new T-Mobile customers. Ported my buddy from Sprint to T-Mobile two weeks ago. On the actual unlimited classic plan, which is $90/month, subsidized GS4 and everything.

posted on Jul 19, 2013, 10:52 AM 1

28. Whateverman

Posts: 3295; Member since: May 17, 2009

Oh, wow! Best Buy could hav head 4 lines from me. Oh, well.

posted on Jul 19, 2013, 11:23 AM 0

31. lolrus

Posts: 29; Member since: May 18, 2013

I can't speak for their policies, they very well may not be able to do new lines on the classic plan. I hate that no one knows that Staples sells phones because I think it's a pretty great place to buy (a bit biased, obviously). For reasons like that; we're a bit of an underdog so some of our policies are lax compared to Best Buy and the other well known authorized dealers. Example: someone came in with a T-Mobile ad with the GS4 at $99 (down payment for value plan, of course) expecting a price match on classic. I was like "uhhh" and my manager was like "sure, whatever." So some lucky person got it for $99 subsidized on the two year contract. I used to work for Radio Shack and stuff like that would have never flown.