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Sprint Halves Rivals' Pricing Plans... Sorta

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.

Sarah Thomas

December 3, 2014

3 Min Read
Sprint Halves Rivals' Pricing Plans... Sorta

Sprint's offer to halve the service price plans of those consumers who switch from AT&T or Verizon sounds pretty good in theory, but -- like most offers in wireless -- the fine print should be in bold.

In what is admittedly its most aggressive promotion since new CEO Marcelo Claure took the helm in August, Sprint Corp. (NYSE: S) said Tuesday that it would halve the service price plans (data, text and voice) of those customers that switch from AT&T Inc. (NYSE: T) or Verizon Wireless . (See Sprint Offers to Halve AT&T, Verizon Customers' Bills.)

So, according to one example it gave in its release, a Verizon customer paying $140 per month for data on a four-line plan (and that can prove it with his or her latest bill) would pay $70 per month for four lines at Sprint, plus get unlimited talk and text.

It's also continuing its offer to pay a customer's early termination fee from AT&T or Verizon, up to $350 per line, or pay off a customer's installment billing plan provided they turn in the phone to Sprint.

But now for the big caveat: New Sprint customers cannot buy a subsidized phone. For every line they are transferring, they will have to lease a phone from the carrier through Sprint Easy pay, opt for installment billing or pay full retail for a new device. These are expenses they may not have had with AT&T or Verizon.

So, here's another example, courtesy of BTIG Research analyst Walt Piecyk in his blog (registration required): A Verizon family of three sharing 4GB per month would be paying $190 for the plan -- $70 for data plus $40 per line. At Sprint, that would cost $95, however, they'd all have to turn in their Verizon smartphones and lease new ones from Sprint adding around $31 per line (if it's an iPhone) and bringing their total to $188. So that's a less-than-whopping $2 of savings a month.

For more on Sprint, head over to our mobile content channel here on Light Reading.

Speaking at an investor conference today, Sprint CFO Joe Euteneuer admitted the "Cut Your Bill in Half" event savings might not come out to a 50% discount, suggesting that net-net might fall closer to 20%. He also said that some customers might come to Sprint, interested in the promotion, but find out a different plan suits them better. Either way, Sprint just wants to get them in the door.

This promotion might not be as radical as it sounds on first read, but it's good that Sprint is continuing to right the ship from a pricing and promotions perspective. It seems to be working too, slowly but surely. Euteneuer said that since Sprint "pulled the Band-Aid off" this summer, its changes have been so effective it is hiring 500 more sales reps to keep up with the volume in stores. (See More Executive Shake-Ups at Sprint , Sprint's New Boss Plans Cost Cuts, Sprint's New Family Plans Double Down on Data and Sprint CEO: Price Cuts First, Best Network Next .)

It expects customer additions to keep coming with its latest promotional plans, even if they aren't half as good as they seem.

— Sarah Reedy, Senior Editor, Light Reading

About the Author(s)

Sarah Thomas

Director, Women in Comms

Sarah Thomas's love affair with communications began in 2003 when she bought her first cellphone, a pink RAZR, which she duly "bedazzled" with the help of superglue and her dad.

She joined the editorial staff at Light Reading in 2010 and has been covering mobile technologies ever since. Sarah got her start covering telecom in 2007 at Telephony, later Connected Planet, may it rest in peace. Her non-telecom work experience includes a brief foray into public relations at Fleishman-Hillard (her cussin' upset the clients) and a hodge-podge of internships, including spells at Ingram's (Kansas City's business magazine), American Spa magazine (where she was Chief Hot-Tub Correspondent), and the tweens' quiz bible, QuizFest, in NYC.

As Editorial Operations Director, a role she took on in January 2015, Sarah is responsible for the day-to-day management of the non-news content elements on Light Reading.

Sarah received her Bachelor's in Journalism from the University of Missouri-Columbia. She lives in Chicago with her 3DTV, her iPad and a drawer full of smartphone cords.

Away from the world of telecom journalism, Sarah likes to dabble in monster truck racing, becoming part of Team Bigfoot in 2009.

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