Bloomberg News

T-Mobile’s Jump Service Lets Users Upgrade Phones More Often (1)

July 11, 2013

T-Mobile US Inc. (TMUS:US), seeking to stand out from larger rivals Verizon Wireless and AT&T Inc. (T:US), introduced a new service called Jump that lets customers upgrade to new phones twice a year.

Under the $10-a-month program, customers can get new phones at the lowest available price after trading in their own models, T-Mobile, the fourth-largest U.S. wireless carrier, said yesterday at an event in New York. The company also said it has upgraded its network more quickly than expected and now offers speedy LTE service to 157 million people in 116 cities in towns. The Bellevue, Washington-based carrier was aiming to reach 100 million people by mid-year.

“I’ll take a victory lap for our team,” Chief Executive Officer John Legere said in an interview yesterday.

The Jump program furthers T-Mobile’s efforts to tinker with the wireless industry’s business model, part of a campaign to brand itself as the “un-carrier.” The company rolled out an installment purchase plan for smartphones in March, breaking from the tradition of subsidizing the devices in return for long-term contracts, a move that has seen customer traffic in stores double, Legere said. It also started offering Apple Inc.’s iPhone earlier this year.

Customer foot traffic gains aren’t necessarily driven by the introduction of the iPhone in April, he said. The device made up 29 percent of smartphones in the second quarter.

That’s well below the rates of T-Mobile’s peers, said Walter Piecyk, an analyst with BTIG LLC in New York.

Contract Gains

“If it turns out that they are successful with this strategy, it’s not because they’re riding on the back of the iPhone,” said Piecyk.

The carrier may also have added contract customers for the first time in three years, two people familiar with the situation said this week. The return to user growth, which comes six months ahead of target, will be reflected in the company’s latest quarterly results, said the people, who asked not to be identified because the data isn’t yet public.

T-Mobile rose 1.4 percent to $24.42 at the close in New York yesterday and has gained almost 50 percent since debuting on the New York Stock Exchange on May 1. Parent Deutsche Telekom AG (DTE) advanced 0.5 percent to 8.90 euros at 9:11 a.m. in Frankfurt.

While T-Mobile declined to comment on its quarterly results, the company has been the fastest-growing U.S. carrier over the past two months, Legere said yesterday.

At the end of March, the carrier had about 20.1 million T-Mobile-branded contract subscribers and 6 million pay-as-you-go users. The last time T-Mobile added contract subscribers was in the second quarter of 2010.

Dish Network Corp., which lost out in bidding wars for T-Mobile rivals Sprint Nextel Corp. and Clearwire Corp., contacted Deutsche Telekom executives earlier this year to explore a potential takeover of T-Mobile, people familiar with the matter said in April.

To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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Companies Mentioned

  • TMUS
    (T-Mobile US Inc)
    • $26.45 USD
    • 0.54
    • 2.04%
  • T
    (AT&T Inc)
    • $33.54 USD
    • 0.03
    • 0.09%
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