One Up is Sprint's (News - Alert) new device upgrade program, launching Sept. 20, 2013, which allows Sprint customers to buy a new phone with no money down, paying for devices in installments over two years.
If a customer terminates service before all of the installment payments are made, the customer pays the balance of the device cost the following month.
After a year, a customer can upgrade to a new phone by trading in the device.
The move by Sprint means all four of the large national carriers will now offer such a program.
T-Mobile US calls its program "Jump." AT&T calls its program "Next," while Verizon (News - Alert) has "Edge."
Image via Shutterstock
The moves show how hard it will be for T-Mobile (News - Alert) US and Sprint to truly disrupt the U.S. mobile market.
T-Mobile US has been trumpeting its “Uncarrier” approach, trying to argue it is different from the other leading U.S. mobile carriers.
But all of the carriers now offer similar plans.
Some might argue the T-Mobile US campaign now will need to change yet again, allowing T-Mobile US to argue it is forcing the rest of the industry to change, and attempting further changes in retail packaging.
T-Mobile US might argue its competitors still have not truly matched its offers, given remaining price differences, especially between T-Mobile US and Sprint, on one hand, and AT&T and Verizon Wireless (News - Alert) on the other hand, at least for single device accounts.
The installment plans have one clear marketing advantage for T-Mobile US and Sprint: splitting off device purchases from recurring service plans allows both carriers to advertise lower monthly prices, even when the total recurring costs over two years might be roughly comparable to the older unified “device-plus-service contract” plans.
There arguably are other reasons such plans have been created, as well. Service providers would prefer not to subsidize end user devices, since that crimps cash flow and raises operating costs.
The installment plans do not necessarily remove that burden. Since users are paying in installments, there still is an inventory issue. Service providers buy the phones from equipment suppliers and then retail them to customers.
But the moves offer more pricing transparency, especially about the cost of recurring service. The plans might also play some role in encouraging users to upgrade devices more frequently. That could have some marginal impact on overall service provider revenues.
The big story, though, is hard it is going to be for T-Mobile US and Sprint to disrupt the U.S. mobile market.
Edited by Alisen Downey