BARCELONA, Spain — In the old days, U.S. wireless customers typically paid $100 or $200 for a phone and agreed to a two-year service contract. Although the phone actually cost hundreds of dollars more, wireless companies made up for it through the monthly service fees for voice, text and data.
T-Mobile decided last spring to stop subsidizing phones and padding the service fees. Instead, it lowered those fees for everyone and charged for phones separately. A few months later, T-Mobile shook up the phone industry again by allowing customers to upgrade before the phone is fully paid off.
Rivals followed with subsidy-free, no-contract phone plans that also allow frequent upgrades, though they continued to offer subsidized plans as well.
T-Mobile eliminated both subsidies and contracts last March. Instead, customers buy phones outright and pay for them in installments over two years. Monthly fees for voice, text and data service have been reduced accordingly.
In July, T-Mobile introduced a $10-a-month program that allows people to upgrade phones up to twice a year instead of every other year. Customers turn in their old phone and pay a down payment with each upgrade. The program, called Jump, gets expensive for those who want to upgrade frequently, given the down payment and monthly fees. But customers get flexibility to keep up with the pace of phone releases.
A few months later, T-Mobile began offering free text and data services to customers traveling to more than 100 countries. Last month, the company stepped up efforts to lure customers from rivals by reimbursing fees for breaking contracts.
T-Mobile also eliminated down payments on most phones this year to make upgrades more economical. Starting Sunday, it’s letting customers upgrade as often as they like.
— though they’ll have additional installments to make right away if they haven’t paid at least half of the phone’s costs yet.