Light Reading

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
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
As indoor small cells start getting deployed at scale, attention is turning toward what else can be done with the base station, including exploring location-based services.
RootMetrics says Sprint has passed T-Mobile in overall network performance, thanks in large part to its improved voice and text quality, but data will be most important going forward.
Sprint CEO wouldn't comment on the rumor that it plans to buy some of RadioShack's stores, but the move makes sense as the carrier looks to expand its distribution this year.
Artemis isn't waiting for 5G standards to work themselves out; it says its technology, pCell, can solve the spectrum crunch right now. But is it too good to be true?
Project Ara – smartphones built around modules – will be launching soon, creating questions about how operators will price such devices as leasing programs have become the norm.
Flash Poll
From The Founder
The New IP is actually bigger even than business. Like another hugely important tech that Light Reading is digging into right now, the New IP has the potential to change the world by fundamentally advancing what it is possible for people to achieve with communications.
LRTV Huawei Video Resource Center
Huawei Shares Its Vision of the Future of Mobile Networks Innovations

2|26|15   |   2:30   |   (0) comments


Mobile broadband is changing our lives. It's reshaping the Internet, industry, and society. It allows us to freely connect with one another anytime, anywhere. At this year's Mobile World Congress, Huawei will share its latest insights and newest ideas and technologies that will shape the future of MBB. They will showcase their end-to-end MBB solutions that will ...
LRTV Huawei Video Resource Center
Accelerate Digitizing, Boost Digital Business

2|26|15   |   6:14   |   (0) comments


A new digital revolution is leading us to a better connected world. Together with millions of digital partners, Huawei will help CSPs to build their digital service ecosystem and aggregate a wide variety of digital services. In this video, we find out how Huawei is going to help CSPs implement digital operations.
LRTV Huawei Video Resource Center
The Secret Recipe to Enabling Hyper-Growth Industries

2|26|15   |   3:38   |   (0) comments


With a number of successful cases on network capability exposure, Huawei is going to share the secret recipe to enabling hyper-growth markets with a step-by-step approach.
LRTV Documentaries
BTE 2015 Is Bigger & Even Better

2|25|15   |   03:13   |   (3) comments


This year's Big Telecom Event (BTE) in Chicago is going to provide more opportunities than ever for networking, getting to grips with key industry challenges and opportunities and, equally as important, having some fun.
LRTV Interviews
Light Reading ICT Leaders Roundtable at MWC 2015

2|12|15   |   1:07   |   (2) comments


On Sunday March 1, 2015, Light Reading will host an ICT Leaders Roundtable in partnership with Huawei. At this half-day event, CIOs, analysts and researchers will discuss key industry trends like virtualization in the cloud with a specific focus on new business models. Located at the luxurious Renaissance Hotel near the Fira Barcelona, space is limited so please ...
LRTV Documentaries
Going Green in 2015

2|12|15   |   02:04   |   (0) comments


Energy efficiency is set to be an incredibly hot topic in the telecom industry this year.
LRTV Custom TV
SDN & NFV: Where Are We Going From Here?

2|11|15   |   11:27   |   (0) comments


Vitesse Semiconductor CTO Martin Nuss gives his perspective on why SDN and NFV should be tightly interconnected and how he sees the industry moving forward.
LRTV Documentaries
Time for Gigabit Europe?

2|9|15   |   01:27   |   (4) comments


Gigabit broadband networks are springing up all around the US and they'll soon become more commonplace in Europe.
LRTV Interviews
Brocade Brings New IP Vision to 2020 Vision Executive Summit

2|3|15   |   4:23   |   (0) comments


In December 2014, Light Reading gathered telecom executives in Reykjavik, Iceland to discuss their vision for high-capacity networks through the end of the decade. The intimate, interactive meeting was set against the backdrop of Iceland's spectacular natural beauty. As one of the event's founding sponsors, Brocade's Kelly Herrell shared his company's strategy at ...
LRTV Interviews
Brocade's Kelly Herrell on the New IP

2|2|15   |   12:36   |   (0) comments


In December 2014, Steve Saunders sat down with Brocade VP of Software Networking Kelly Herrell at Light Reading's 2020 Vision executive summit in Reykjavik, Iceland. They spoke about Brocade's approach to the New IP, the future of the telecom industry, and more.
LRTV Huawei Video Resource Center
Dr. Dong Sun Talks About Carriers' Digital Transformation & Huawei’s Telco OS

1|29|15   |   6:28   |   (0) comments


Dr. Dong Sun, Chief Architect of Digital Transformation Solutions at Huawei, discusses how telecom operators can become digital ecosystem enablers and deliver optimal user experiences that are in real-time, on-demand, all-online, DIY and social (ROADS).
LRTV Huawei Video Resource Center
Huawei's Chief Network Architect Talks about Network Experience & Operators’ Strategies

1|29|15   |   3:39   |   (0) comments


In the digital age, network experience has become the primary productivity especially for telecom operators. In this video, Wenshuan Dang, Huawei’s Chief Network Architect, discusses how carriers can tackle the challenge of infrastructure complexity in order to enhance business agility and improve user experience.
Upcoming Live Events
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 12, 2015, Grand Hyatt, Denver, CO
All Upcoming Live Events
Infographics
Net neutrality, broadband services and the current outlook on data consumption, as presented by the New Jersey Institute of Technology.
Hot Topics
Cyber Security Expert Warns: You're Doing It Wrong
Sarah Thomas, Editorial Operations Director, 2/23/2015
10 Weirdly Useful IoT Devices
Eryn Leavens, Copy Desk Editor, 2/24/2015
Small Cells Enabling Location Services
Sarah Thomas, Editorial Operations Director, 2/25/2015
Is FCC Weighing Net Neutrality Changes?
Mari Silbey, Independent Technology Editor, 2/25/2015
MWC: Let the Madness Begin
Ray Le Maistre, Editor-in-chief, 2/23/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Check out Light Reading's interview with Jay Samit, the newly appointed CEO of publicly traded SeaChange International Inc. With a resume that includes Sony, EMI, and Universal, Samit brings a reputation as an entrepreneur and a disruptor to his new role at the video solutions company. Hear what he had to say about the opportunities in video, as well as the outlook for cable, telco, OTT and mobile service providers.
G'day! And welcome to an entirely new feature on Light Reading -- our weekly "CEO-to-CEO" interview.