The Economics That Make T-Mobile’s Jump Program Possible — And Intriguing

It has become a rule of thumb in cellphones that it just isn’t economical or practical to upgrade one’s phone more than once every two years. So, how is it that T-Mobile, through its new Jump program, is going to be able to offer customers the opportunity to upgrade as often as twice a year?

The answer is a complex one, fueled by a range of factors from the surprisingly high resale value for popular smartphones to the importance of attracting and hanging on to high-end customers. First off, T-Mobile’s program isn’t free. Customers pay $10 a month, though that fee includes protection against theft, loss and accidental damage — a service for which T-Mobile had charged fees ranging from $8 to $12 on its own. And to get the new phone, customers essentially trade in their old one in exchange for being freed up from having to pay whatever they still owed on their own phone.