T-Mobile US encourages smartphone promiscuity

T-Mobile US has a habit of doing things that people don’t expect, to such an extent that it’s now expected. One of the latest moves is to have a go at rejuvenating the subsidized smartphone model.

The T-Mobile JUMP! On Demand offering is not a new one, but it is one which has been given a bit of the Uncarrier love. It’s essentially a lease mobile contract, which allowed customers to exchange their device three times a year, but this has now been updated to once a month! The only conditions are the returned phone has to be in ‘good’ condition and users can only change to devices they haven’t had before.

On the surface of things, it seems too good to be true. Users can change their devices almost as often as they like, admittedly this increases the payment which will have to be made to T-Mobile US at the end of the 18-month lease period should they want to keep the phone, but you have to question where T-Mobile US is making money. One might assume that T-Mobile US is going to be super-stringent on the condition of the devices, or that there will be something buried down deep in the T&Cs, but it does look to be a pretty good deal on the surface.

Admittedly, there aren’t that many people who would want to change their devices that often, but it does allow users to take advantage of deals on devices. Samsung has previously given away six-month subscriptions to Netflix, free 256GB microSD cards, and Gear VR controllers to those pre-ordering its flagships. There will be a few who will take advantage of this deal.

So where is T-Mobile making money? Maybe that isn’t the initial intention. Many said that it wouldn’t be able to make money off unlimited data plans, that was against industry trends of course, but it collected so many customers on those deals the economy of scale kicked in. Maybe it is the same here? Like Jio, T-Mobile is hording customers and increasing the stickiness of the brand, knowing that the long-term gain will be substantial. It would be considered a calculated and cunning ploy, but they are German descendants after all.

What this means in the wider landscape is just another headache. The likes of AT&T and Verizon did a lot last year to move people away from unlimited data plans, but then T-Mobile US turned up and reversed that trend with an Uncarrier move. Now it would appear to be trying the same with subsidized phone contracts. Everyone is trying to steer clear of the less-economical options, but John Legere and his magenta army are changing the rules again.

Whether this is enough to turn global trends around is possibly a bit unlikely, but if it proves to be successful, it might makes the likes of AT&T and Verizon do a bit of backtracking.

Another interesting idea is T-Mobile ONE Unlimited 55+. It is essentially a contract aimed at the baby boomer generation, a demographic which is often overlooked by competitors. For most, targeting the lucrative millennials, or those who are starting families in their 30s, is the primarily objective, but Legere’s latest installment is a new one.

Starting August 9, customers who qualify will can get two lines of T-Mobile ONE for $60. That comes with unlimited talk, text and 4G LTE data (though some heavy users have been throttled in the past), as well as all the other benefits.

“For years, the carriers have been patronizing the generation that invented wireless. They thank these mobile pioneers by selling dumbed down ‘senior’ plans with exactly zero data and – get this – night and weekend minutes! That’s not just idiotic — it’s insulting!” said Legere. “Today, the Uncarrier ends this ridiculousness with T-Mobile ONE Unlimited 55+ – an offer that recognizes how Boomers and beyond actually use their smartphones!”

It might not be as such a long-term strategy as target those in their 30s and generating loyalty, but there are 93 million Americans in the US over age 55. 74% have a smartphone on which they spend 149 minutes a day. This is quite a bit less than a millennial, but it is still a hefty market where money can be made.