Wireless Competition Heating Up as Sprint Unveils New Pricing Plan
New Sprint CEO Marcelo Claure said the carrier will slash prices in a move aimed at customers who want more data at lower prices. Claure replaced longtime Sprint CEO Dan Hesse Aug. 11, promising in a news release announcing his new position to make the carrier more competitive (http://bit.ly/1pY1wPO).
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Sprint said that starting on Friday (http://bit.ly/VDCUB9), it will offer four lines and 20 GB of data for $160 “compared to 10GB of data for the same price from AT&T or Verizon.” As an initial offer, through next year a family can get up to 10 lines and 20 GB of data for $100 a month. Sprint also offered to pay early termination fees owed to another carrier when customers switch to Sprint, a strategy modeled on an earlier offer by T-Mobile. “Sprint is offering the best value to data-hungry consumers. Period,” Claure said in a Monday news release.
T-Mobile has its sights on passing Sprint to become the nation’s third-largest carrier (CD Aug 1 p1). T-Mobile CEO John Legere wasted little time firing back at Sprint on Twitter. “The new offers are confusing and the network remains unchanged (and terrible),” Legere (@JohnLegere) tweeted. “They say it’s a ‘new day for data’ but it’s the same day for the shitty network.”
The offer may be less than meets the eye, MoffettNathanson analyst Craig Moffett said Tuesday. The prices are still not as low as some of those offered by T-Mobile and the offer is available only for new subscribers, he said. The prices “fall short of the shock-and-awe cuts that some had expected,” he said. “Whether the new prices will be enough to fully stem subscriber defections remains to be seen.”
Sprint’s pricing move “falls short of ’truly disruptive,'” said New Street analyst Jonathan Chaplin. BTIC analyst Walter Piecyk said the offer “will make those comparison tables used in advertising look better for Sprint given the 20 GB of data being offered.” But the bigger challenge “is convincing consumers that Sprint can deliver an equivalent if not superior network,” Piecyk said.