Upgrade Plans Are Latest Wireless Trend

U.S. wireless carriers have been falling over themselves to launch new initiatives at consumers who might want to upgrade their phones more often. Considering that analysts say this segment is probably small, these plans (and the speed at which they’ve been announced) are a testament to how competitive the industry has become in luring and keeping customers. 

Over the past two weeks, three of the nation’s top four wireless carriers have introduced device upgrade plans that allow consumers to pay monthly fees to upgrade their phones more often. T-Mobile and AT&T kicked off the flurry of announcements with their Jump and Next plans (last week and earlier this week, respectively), which allow consumers to buy new devices on a payment plan, and upgrade after six months (for T-Mobile) or a year (in AT&T’s case) of payments.  

On Thursday, Verizon announced its Edge plan, which like the other two plans allows consumers to opt for an installment plan that allows for upgrading after six months. Indeed, the only major carrier that hasn’t launched a plan yet is Sprint, and technology and telecommunications analyst Jeff Kagan says that time is likely coming. 

“AT&T and T-Mobile have been working on these plans over the past few months. I think [Verizon] saw the trends in the industry and they didn’t want to be left out,” Kagan tells Marketing Daily. “Now the only question is, ‘What about Sprint?’ If the top two and the number four carriers are doing it, I can’t believe the number three won’t.”

The quick release of these announcements follows closely with an industry mindset that has seen carriers adopt competitors’ programs (think of friend circles and unlimited mobile-to-mobile pushes of the past) to keep their customer base, says technology and strategy consultant Chetan Sharma. “Operators will do whatever they can to lower their churn, and new customers are hard to find,” Sharma says.

As the wireless industry approaches saturation in the U.S., these new plans (and the speed at which they were announced by the carriers) mark a shift in the way these companies are viewing their customers, Kagan says. “We’re moving to a more customer-centric industry from a company-centric one,” he says. 

Yet, both Sharma and Kagan say these new upgrade programs will have only a limited appeal among the wide base of wireless customers. “If you were to ask 10 people [if they wanted it], I don’t know how many would want a new phone every year,” Kagan says. “But for those who do, it’s there.”

Next story loading loading..