By Sinead Carew
NEW YORK, July 10 (Reuters) - T-Mobile US Inc saidon Wednesday that customers would be allowed to upgrade phonesevery six months and it unveiled a family plan for prepaidcustomers as it moves to lure customers away from its threebigger rivals.
Verizon Wireless , AT&T Inc and SprintNextel Corp offer phone discounts in exchange for tyingcustomers to two year contracts and typically do not allow phoneupgrades during that period.
T-Mobile, which is under pressure to stem years of customerlosses, is betting people will switch to its service becausethey want to change phones more often than its rivals allow.
"You can upgrade when you want, not when you're told,"T-Mobile Chief Executive John Legere, who was appointed inSeptember 2012, said in a dig at his bigger rivals at a New Yorkevent where he announced the move.
The No. 4 U.S. mobile provider also hopes to attract morecustomers who pay for calls in advance by offering a prepaidfamily plan that does not require a credit check.
It said its $100 monthly fee for a family of four is about$100 less than AT&T's service, saying about a third of U.S.families would not pass the credit checks required for typicalwireless family plans.
AT&T and Verizon attribute much of their success inretaining customers to family plans because it is harder for anentire family to change service than an individual.
Customers who want frequent phone upgrades must sign on to aservice called Jump that requires them to pay a $10 monthlyinsurance fee on top of monthly service fees and a one-off downpayment that partially covers the cost of the phone. They arealso charged a monthly fee of up to $20 per month to pay for theremainder of the phone.
When T-Mobile customers want an upgrade, they can bring aphone to a store and swap it for a new device. They pay anotherdown-payment and resume monthly payments for that device. Themoves follows T-Mobile's elimination in March of long-termcontracts and handset subsidies.
The event on Wednesday was T-Mobiles' first media functionsince it merged with MetroPCS in April.
It also announced that customer defection rates are lowerthan ever because of new marketing efforts and the introductionin April of the Apple Inc iPhone, which accounted for29 percent of its smartphone sales in the second quarter.
T-Mobile shares closed 1.3 percent higher at $24.42 on theNew York Stock Exchange.