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T-Mobile US: Go ahead, PAY NOTHING up front for any device

Summer promotion bids adieu to down payments

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Updated Fourth-ranked US wireless carrier T-Mobile has hit back at its competitors' phone-upgrade plans with a new summer promotion that does away with down payments on all new devices.

In March, T-Mobile announced that it was eliminating traditional device subsidies in favor of a model in which customers either pay the full price of a new device up front, or else pay a down payment and then make up the rest over 24 interest-free monthly installments.

The carrier followed that up earlier this month with Jump!, a plan that allows customers to trade in their phones for new ones up to twice a year, for an additional monthly fee of $10.

Verizon and AT&T, the two largest US carriers, wasted no time countering those offers with pay-as-you-go, device-swapping plans of their own. But unlike Jump!, neither Verizon's Edge nor AT&T's Next requires customers to put up a down payment for a new device.

Not to be outdone, T-Mobile announced on Friday that it is dropping the down-payment requirement for all devices it offers, including smartphones, tablets, feature phones, and mobile hotspots.

"The number of reasons not to switch to T-Mobile this summer is ZERO," T-Mobile president and CEO John Legere said in a statement, adding that customers who sign up during the promotional period can still participate in the Jump! program even though they haven't paid a lump sum up front.

Because customers always pay the full retail price for their devices under T-Mobile's current model, however, doing away with down payments does affect the size of their monthly installments.

For example, customers can currently get a Samsung Galaxy S 4 from T-Mobile for $149.99 up front, followed by 24 monthly payments of $20. Without the down payment, the payments go up to $25 per month. Similarly, an iPhone 5 that went for a $21 per month with a down payment of $145.99 is $27 per month without.

If you do the math, though, you'll see there are some good bargains hidden in these figures. Under the old plan, you would have spent $629.99 on that Galaxy S 4 after the 24 months were up. With the summer promotion, your total cost is just $600. Nokia Lumia phones are discounted, too, but some handsets actually cost more under the promotion than T-Mobile's current list prices, so keep your calculator handy.

Here's a partial list of monthly payments you can expect under the new promotion (and note that all of these plans are subject to credit approval):

Table showing T-Mobile monthly payment schedule

When you take away the down payment, the monthlies go up (source: T-Mobile)

T-Mobile also charges $10 for a "SIM starter kit" for each device, unless you already have a working T-Mobile SIM card.

Friday's announcement said that the zero-down offer starts on Saturday, July 27, and that it will be available "this summer." El Reg tried to pin T-Mobile down on an exact date when the offer might end, but the company did not respond to our request. ®

Update

A spokeswoman for T-Mobile contacted us late on Friday to let us know that there is no hard stop date for the summer promotion, as yet – though she did say that T-Mobile's promotions typically "are days/weeks long (not months)," so take that as you will.

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