September 16, 2013
Late To The Game: Sprint To Offer Early Upgrade Plan
Michael Harper for redOrbit.com - Your Universe Online
Under the One Up plan, Sprint customers will be allowed to trade in their old devices to take part of the program. Customers will then pay the remaining cost of their devices in monthly installments. Unlike the early upgrade plans of AT&T and Verizon, Sprint will offer a $15 discount on monthly plans for customers who enroll in this program. CNET claims Sprint will be ready to launch this program on September 20, the same day Apple’s iPhone 5S and 5C are released.
According to a leaked screenshot describing this deal, Sprint claims their early upgrade plan is cheaper than the rest, saving customers upwards of $539 a year from more expensive plans from competitors. Assuming customers buy an unsubsidized phone at $649, the price of an 8GB iPhone off contract, they’d be charged $27 each month on top of a $65 plan. At the end of the month, they would pay an estimated $92 for the phone and the Unlimited My Way plan. Sprint claims at this rate, their customers will pay $220 less than T-Mobile customers in the first year.
Sprint’s low priced plans help them make these claims, of course. T-Mobile’s Unlimited plans start at $70 a month whereas similar plans from AT&T and Verizon cost their customers $110. Verizon customers, according to the leaked screenshot, pay an extra $539 each year once up front and activation fees are paid. On the other hand, Verizon also charges their customers less — $79 to Sprint’s $88 — to take advantage of the early upgrade plan.
There is a catch, of course. Customers must have been with Sprint for at least a year to participate in this plan. Additionally, customers must trade in their existing phone in good working order to be eligible for One Up. Users with premium smartphones in good working order, an iPhone 5 or Galaxy S4, for instance, may do better to sell their phones outright on the Internet and pay for the device out of pocket rather than pay monthly “rent” to Sprint until the device is paid for. CNET also claims customers not eligible for One Up can take advantage of “Upgrade Now,” a little used program which lets customers upgrade early for a fee.
This pending move by Sprint is only more proof of the rising smartphone trend in America. Smartphone manufacturers are releasing new phones every month, the largest of which release new flagship phones every year. The old two-year contract model is not friendly to those customers who want to stay up to date with current technology and these customers who do stick with their phones for two years may find themselves several months behind the technological curve. While “Edge” from Verizon, “Jump” from T-Mobile and “Next” from AT&T allow these customers to upgrade their phones every year or more, they aren’t actually paying less for these devices.
As mentioned before, customers are essentially renting their devices from the carriers rather than ask the carrier to pay steep subsidies to the manufacturers for the right to offer the phones. At $27 a month, Sprint customers who take advantage of One Up won’t have paid any more than they would have to buy the phone outright. On the other hand, they are essentially locked into another two-year plan, and Sprint gets an additional $176 upfront by simply offering the deal. Customers also lose the right to sell their own devices on their terms, ultimately releasing them from their contracts and potentially saving them some cash.