Light Reading
T-Mobile lowering its family data pricing is forcing Sprint to respond and could spark a true price war in the US.

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

Sarah Reedy
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
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   >   >>
Educational Resources
sponsor supplied content
Educational Resources Archive
More Blogs from Light Reedy
BlackBerry and T-Mobile are considering kissing and making up, but only if their CEOs can get along.
Sprint's promotion to halve the service pricing plans of those switching from AT&T or Verizon isn't as good as it seems when you factor in the new device requirements.
OTT chat app Kik has raised $38.3M in funding and acquired a GIF maker, showing operators there are other ways to monetize chat than ads and fees.
Join us Tuesday at 12:00 p.m. EST for a live chat with TM Forum's Rebecca Sendel and Rob Rich about how operators are approaching big data analytics for the growing Internet of Things.
With help from SevOne, the Canadian operator gained valuable visibility into its network. Now, it's tackling the challenge of internal silos.
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Interviews
CenturyLink: Building the Case for NFV

12|19|14   |   02:14   |   (0) comments


At the 2020 Vision Executive Summit, James Feger, VP, Network Strategy & Development at CenturyLink, talks about how the US operator is approaching virtual network functions from an operational and business case perspective.
LRTV Interviews
Liberty Global Sees Business Goldmine

12|18|14   |     |   (0) comments


Steen Sorensen, VP of business services for Liberty Global, explains where the giant international MSO sees growth potential.
LRTV Documentaries
EE: The Road to 5G

12|16|14   |   16:02   |   (1) comment


Andy Sutton, the principal network architect at UK mobile operator EE, explains how his company is using Wembley stadium as a wireless test bed and how that's helping EE to plan the evolution to 5G.
LRTV Huawei Video Resource Center
Highlights of Huawei's NFV Open Cloud Forum 2014

12|16|14   |     |   (0) comments


Huawei hosted its inaugural NFV Open Cloud Forum during the SDN & OpenFlow World Congress 2014 in Düsseldorf, Germany. The Forum brought together technology thought leaders, senior executives and telecom professionals from global carriers, industry associations, as well as other partner companies in the ecosystem, to exchange views on and collectively explore how ...
LRTV Custom TV
Realizing Operators' Digital Vision

12|16|14   |   5:23   |   (0) comments


Leveraging technology is fundamental to digital transformation but understanding customers and serving them really well is at the heart of digital businesses. TM Forum lists the following as the strategic pillars of the digital business: business agility and rapid innovation, operational agility and effectiveness, IT and data centricity, plus customer centricity. ...
LRTV Documentaries
US Cellular Injects Analytics Into LTE

12|16|14   |   2:57   |   (1) comment


US Cellular's Mario Vela explains how the operator uses analytics for network planning and what comes next as the carrier looks to eke more value out of its metrics.
LRTV Interviews
How Cox Biz Plans to Keep Growing

12|15|14   |     |   (2) comments


Steve Rowley, SVP of Cox Business, details how the third-biggest US MSO intends to boost its revenues to $2 billion and beyond over the rest of the decade
LRTV Huawei Video Resource Center
Interview With Bill Zhang, Director of SoftCOM Product Management, Huawei

12|15|14   |   2:50   |   (0) comments


Bill Zhang elaborated on Huawei's open philosophy in NFV solution development and network architecture design at the SDN & OpenFlow World Congress 2014.
LRTV Huawei Video Resource Center
Event Highlights: Huawei at SDN & OpenFlow World Congress 2014

12|15|14   |   3:43   |   (0) comments


Huawei joined the 2014 SDN & OpenFlow Congress as one of the key sponsors and contributors. At the event, Huawei reinforced the openness and flexibility of its network infrastructure strategies, and provided updates on its SDN and NVF innovations. Through participations at the exhibitions, forums and speeches, Huawei encouraged the industry to "think bigger and ...
LRTV Interviews
How Cable Biz Services Hit $10B Mark

12|12|14   |     |   (1) comment


Cable operators reached $10 billion in annual business services revenues by delving deeper into their vertical markets and expanding beyond the smallest firms.
LRTV Documentaries
Mediacom Aims to Test Connected Tractors

12|11|14   |   05:07   |   (3) comments


Cable business service provider is taking its services to the 'agribusiness' sector in partnership with farm equipment specialist John Deere and is getting involved in Gigabit Cities developments.
LRTV Interviews
TWC Business Looks Beyond $3B

12|10|14   |     |   (0) comments


TWC Business Services chief Phil Meeks explains how his unit has reached $3 billion in annual revenues and what its plans are for next year.
Upcoming Live Events
February 10, 2015, The Westin Peachtree Plaza, Atlanta, GA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Hot Topics
T-Mobile, BlackBerry Flirt With Reuniting
Sarah Reedy, Senior Editor, 12/17/2014
1-Gig: Coming to a Small Town Near You
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 12/17/2014
Comcast Launches 4K Streaming Service
Alan Breznick, Cable/Video Practice Leader, 12/18/2014
US Carriers, You're Going to Cuba!
Mitch Wagner, West Coast Bureau Chief, Light Reading, 12/18/2014
T-Mobile Lights Up 27 Wideband LTE Cities
Sarah Reedy, Senior Editor, 12/15/2014
Like Us on Facebook
Twitter Feed
Webinar Archive