& cplSiteName &

Sprint, T-Mobile: The Price War's On

Sarah Thomas
7/30/2014
50%
50%

Up to this point, the pricing changes the US wireless operators have been making have seemed more like rhetoric than actual savings, but now both Sprint and T-Mobile are signaling that the price war is about to get real.

First T-Mobile US Inc. lowered its family plan pricing to $100 for 4 lines and 10GB of data, a full $60 less than the competition. The deal does have its caveats -- each line is limited to 2.5GB and it's only available until the end of September -- but it's a pretty compelling offer if you can act quickly.

What T-Mobile's new offer really highlighted is how weak Sprint Corp. (NYSE: S)'s looked in comparison. Sprint's comparable Framily plan costs $160, includes only 4GB of data, doesn't allow for tethering, and charges overages. The inherent weakness of this is something Sprint CEO Dan Hesse acknowledged on the company's second quarter earnings call Tuesday morning. (See Sprint Seeds Market with LTE-A Handsets and Sprint Earns $23M in Q2.)

Hesse noted that while the plans were competitive when they launched earlier this year, the market dynamics have changed. As such, Sprint plans to experiment with lower pricing plans. The Sprint boss said these experiments will be for both unlimited and tiered plans, but stressed that customers still really want unlimited, so he'd be "very surprised" if new plans don't have an unlimited element.

"It was competitive then, but it's become less competitive at certain line levels," Hesse admitted of Sprint's Framily plans. "It's too early to have results, but we'll learn from those trials. We haven't made decisions yet, but may need to make adjustments to pricing levels based on what we learned."

On the prepaid front, Sprint's Virgin Mobile USA Inc. (NYSE: VM) brand launched a new Wal-Mart exclusive plan, Virgin Mobile Custom, that lets customers build plans around their usage -- lines start at $6.98 a month, plus $5 unlimited access to Facebook, Twitter, Pinterest, or Instagram, or all four for an extra $10 per month. The plans are changeable on the fly from customers' mobile phones and also include granular parental controls.

The new plan, like AT&T Inc. (NYSE: T)'s toll-free data plans, is already getting some flack for encouraging use of certain apps over others, but it's something Sprint more or less admitted it's exploring as well.

It's clear that operators are moving from treading lightly into pricing customization into full-fledged data plan shakeups and experiments. This should ultimately be a good thing for the carriers and potentially even their customers, especially if the price war that Sprint and T-Mobile are trying to spark does take hold.

Of course, this could all be a moot point if Sprint and T-Mobile merge, as they are hoping, but it's good to see they're keeping each other -- and their larger competitors -- on their toes in the meantime. (See Sprint, T-Mobile Settle on $32B Price and Sprint & T-Mobile: A Tale of Two Maps.)

— Sarah Reedy, Senior Editor, Light Reading

(17)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
briandnewby
50%
50%
briandnewby,
User Rank: Light Sabre
8/1/2014 | 11:23:21 AM
Re: Big difference
We are an election office, so our needs are seasonal.  The $3,000 per month is an average, with much of it spent in two separate one-week periods.  So, we wouldn't really be swinging, but you're right--we have a sweet deal on the handsets ($0).

The bigger issue with other carriers would be the ability to leave them--not just termination fees, but investing the time to get to a live person to cancel (it's a bad horror movie if you have AT&T service and try to cancel on the web).
pcharles09
50%
50%
pcharles09,
User Rank: Light Beer
7/31/2014 | 11:52:16 PM
Re: Big difference
@MarkC73,

"I was on a single bar as far as reception and pulled about 10mbps down/6 up during peak hours"

WOW, with Sprint, I'm lucky if I can barely place a call when I have less than 2 bars. That's impressive. I haven't even tried using data when the bars (or dots in my case) are that low.
pcharles09
50%
50%
pcharles09,
User Rank: Light Beer
7/31/2014 | 11:50:37 PM
Re: Big difference
@briandnewby,

Do you have a backup provider in mind just in case your connect jumps ship? If yes, would you mind sharing. My guess is that the 3k/mo would turn into a lot more...
MarkC73
50%
50%
MarkC73,
User Rank: Light Sabre
7/31/2014 | 10:52:09 PM
Re: Big difference
Yes it's pretty awesome bang for the buck, I'm sure complaints and coverage are regionally dependent, but my most frequent hangouts are all pretty well covered where I'll get at least HSPA+, but I do sync up to the LTE network as well.  I was on a single bar as far as reception and pulled about 10mbps down/6 up during peak hours.  Maybe I'll try and do some spot testing during different times in different areas.  While that's far from stellar, I'm not sure of all the factors and have no reference.
briandnewby
50%
50%
briandnewby,
User Rank: Light Sabre
7/31/2014 | 9:29:39 PM
Re: Big difference
I run a government office, about the size of a medium-sized small business, 16 full-time employees, 50 part-time, and about 2,000 seasonal.  Cellular (is it really called that--it's really a subset of "mobile" or "wireless "and it seems so pretention to say 3G/LTE) is a large expense for us.

We use hotspots, smartphones, and tablets, and our telecom costs this year will be about $3,000 a month.

We use Sprint and have an excellent account manager.  I used to work for Sprint, 10 years ago at this point, so that might have helped us get more attention or better service initially, but if he changed jobs, I don't think we'd get the time of day from any of the carriers.  We would be telesales at best.

There's something between "Framily" and enterprise, and it seems like a sweet spot not being addressed.
pcharles09
50%
50%
pcharles09,
User Rank: Light Beer
7/31/2014 | 7:27:45 PM
Re: Big difference
@briandnewby,

I'd agree with that sentiment. I know alot of business users that still continue with Sprint only for the grandfathered plans. I bet if they had a choice now, they'd take thir business elsewhere. It's going to be interesting to see where they go next if those users jump ship.
pcharles09
50%
50%
pcharles09,
User Rank: Light Beer
7/31/2014 | 7:26:08 PM
Re: Big difference
@MarkC73,

$30 a month. That's a steal. Especially that most of the providers try to force you into the everything plans that usually start areound $80-90/mo before taxes & fees.

I used to have tons of complaints about Sprint but over the years, that's lessened.
briandnewby
50%
50%
briandnewby,
User Rank: Light Sabre
7/31/2014 | 11:02:55 AM
Re: Big difference
I think the Sprint business panache is more legacy than real.  Sprint bought Nextel, not knowing why, really--thinkiing it was for "push to talk" but really Nextel was an animal in the small business and government segments.  Much of that tenacity is gone.  Meanwhile, Sprint never had an advantage in the Enterprise space and lost competencies on the wireline side.  Sprint is about as much of a consumer play as T-Mobile going forward, I think.
MarkC73
50%
50%
MarkC73,
User Rank: Light Sabre
7/31/2014 | 10:47:19 AM
Re: Big difference
In my local area, most people I talk to about Sprint have nothing but complaints, including business customers and MVNO customers.  While T-Mobile is viewed as the value play.  I'm a T-Mobile customer myself, and though I'm not contributing to their bottom line much, I'm very happy getting my 5G for $30 month, granted I only have a 100 minutes but who actually uses their phone to talk? ;)  ATT and Verizon definitely have better networks but you pay for it.  I guess I could get a group together and make a family plan...
pcharles09
50%
50%
pcharles09,
User Rank: Light Beer
7/31/2014 | 9:36:47 AM
Re: Big difference
I think Sprint has more clout with business users and T-Mobile with consumers so combining may provide the same service but under the same 'brand' umbrella.
Page 1 / 2   >   >>
More Blogs from Que Sera Sarah
Intel's Lynn Comp joins WiC on Tuesday, Sept. 13 at 1PM EST to talk company culture -- what it is, how to craft a positive one and how to communicate it internally and externally.
Join Women in Comms for its 10th networking breakfast and panel discussion, where we promise to tackle those uncomfy questions, on Wednesday, Sept. 14, in Denver.
WiC congratulates the winners of our inaugural Leading Lights awards: Cisco's Yvette Kanouff, Zayo Group's Sandi Mays and startup Grid4C.
Leaders from Mellanox, Arista Networks, Syniverse, ECI Telecom and Cisco round out WiC's inaugural female tech pioneers of the year.
Women from AT&T, Ciena, Ixia, Zayo Group and Fujitsu make our shortlist for working to advance the cause of women in the next-gen comms industry.
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Wednesday, October 5, 1:00PM EDT
Gigabit & Smart Cities
Joe Kochan, COO & Co-Founder, US Ignite
UPCOMING COURSE SCHEDULE
Friday, October 7, 1:00PM EDT
Gigabit & DOCSIS 3.1
Ty Pearman, Director, Access Architecture, Comcast
Wednesday, October 19, 1:00PM EDT
Securing a Virtual World
Rita Marty, Executive Director, Mobility and Cloud Security, Chief Security Office, AT&T
Friday, October 21, 1:00PM EDT
Security: Evolving the Data Center
Rasool Kareem Irfan, Head, Telecom & Infrastructure Security Practice, Tata Communications Transformation Services Ltd (TCTS)
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Documentaries
From Philly, With Love

9|30|16   |     |   (5) comments


Join Alan Breznick, cable's answer to the Italian Stallion, as he runs through the highlights of SCTE Cable-Tec Expo, lumbers along in Rocky Balboa's footsteps and searches for the perfect Philadelphia cheesesteak.
LRTV Interviews
CenturyLink: SD-WAN Customers Looking for Value Not Cost Savings

9|30|16   |   5:31   |   (0) comments


At NFV & Carrier SDN in Denver, CenturyLink's Eric Nowak told Light Reading that when customers launch SD-WAN, they aren't necessary looking to save money, but instead they are looking for more value from what they're spending. He also shared some unique case studies and lessons learned from launching SD-WAN services.
LRTV Custom TV
Flexible Deployment Approaches for the Gigabit Services Evolution

9|29|16   |     |   (0) comments


For many operators, the gigabit evolution begins with the shift from DOCSIS 3.0 to DOCSIS 3.1. But that move represents a change not only in the protocol itself, but in the approach to architecting their entire DOCSIS delivery chain -- from the headend to the outside plant and home gateway components.

Jonathan Ruff, senior director of global technical ...

LRTV Interviews
Level 3 VP: Enterprises Need More for Less

9|29|16   |   05:27   |   (0) comments


Andrew Dugan, Level 3 group vice president of global technology and IT, says enterprises need more bandwidth and they need it faster and with greater security, but they want to spend less, if possible. They are looking to carriers to reduce their network complexity and help protect them from cyberattacks as well.
LRTV Interviews
CenturyLink: SDN/NFV Pose New Interconnection Possibilities

9|28|16   |   04:37   |   (0) comments


Network operators should develop new APIs and business processes for reselling virtual assets to each other, says CenturyLink's Bill Walker. That will enable them to build digital business portfolios that help them avoid becoming commodity transport providers.
LRTV Interviews
Level 3: Overcoming Terror of Being Supplier, Integrator & Developer

9|28|16   |     |   (0) comments


At Light Reading's NFV & Carrier SDN event in Denver, Travis Ewert of Level 3 Communications said there is terror in becoming supplier, integrator and developer, but it can be overcome and be cost effective.
LRTV Custom TV
Introducing IoT World News

9|27|16   |   01:43   |   (0) comments


Self-driving cars, medical sensors, smart cities... and refrigerators. In order to address the huge scope of IoT, KNect365 has created a unique online community that will help businesses to understand and monetize the opportunities that live within the IoT market. We look forward to welcoming you to IoT World News -- your gateway to a better connected future.
LRTV Interviews
AT&T: Reusable Functions Next NFV Key

9|27|16   |   06:03   |   (0) comments


The next generation of NFV has to break functions down into reusable software chunks, making everything much more cloud-like.
LRTV Interviews
Masergy on Security: Attackers Gaining Upper Hand

9|27|16   |   5:10   |   (2) comments


At Light Reading's NFV & Carrier SDN event in Denver, Ray Watson, vice president of Global Technology at Masergy, says that because of the growth in virtualization, the threat landscape is shifting in favor of the attackers. As a result, service providers need to think beyond just defending the perimeter and take a more holistic approach to security.
LRTV Interviews
Verizon Takes Next Step on Biz Virtualization Journey

9|26|16   |   4:38   |   (2) comments


At September's NFV & Carrier SDN event in Denver, Light Reading sat down with Victoria Lonker, director of Product and New Business Innovation at Verizon, to chat about where the carrier is with delivering virtualized services to business customers.
LRTV Interviews
Global Services: The $40B Face-Off

9|26|16   |   05:53   |   (1) comment


More service providers than ever before are battling it out to win a slice of what is now a $40 billion global communications services pie, explains Ovum Principal Analyst David Molony.
LRTV Documentaries
MEC Congress: The Key Takeaways

9|22|16   |   03:25   |   (3) comments


Three key takeaways from the Mobile Edge Computing (MEC) Congress in Munich, Germany.
Upcoming Live Events
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Eurobites: Telefónica Taps Juniper for Network Security
Paul Rainford, Assistant Editor, Europe, 9/26/2016
AT&T CEO Backs Black Lives Matter
Dan Jones, Mobile Editor, 9/30/2016
Powell Kills the Cable Show
Mari Silbey, Senior Editor, Cable/Video, 9/29/2016
Telstra Sees Quadrupled Data Capacity by 2020
Carol Wilson, Editor-at-large, 9/28/2016
From Philly, With Love
Alan Breznick, Cable/Video Practice Leader, Light Reading, 9/30/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
There's Nothing Like Missing a Full Minute of Pokémon Go Click Here
Live Digital Audio

A vital part of increasing the number of women in comms is transforming the ways companies can support and empower women. While progressive company policies that support both men and women in achieving work-life balance are a step in the right direction, creating a company culture that supports those policies can at times be more challenging.

During this show, we'll talk to Lynn Comp, Senior Director of Industry and Sales Enabling (ISE) in the Network Platforms Group at Intel, about why those challenges exist and how companies can overcome them. She'll provide insight into how Intel has worked to create a culture that supports work-life balance, and provide steps and guidance for other companies wishing to do the same. We will also leave plenty of time to get your questions answered live on the air.