Sprint has taken the wireless pricing war up a notch, announcing new Sprint Family Share Pack pricing that offers 20 gigabytes of shared data, unlimited talk and text for up to 10 lines for $100 a month through 2015. Customers also will get an additional 2GB per line for up to 10 lines.
Additionally Sprint said it would waive data access charges for handsets, tablets and mobile broadband devices on 20GB or higher data allowances for up to 10 lines for customers who switch their numbers from another carrier. Those charges range from $15 to $40 per line depending on the monthly data allotment and whether or not the customer has a subsidized mobile device.
Sprint also is borrowing an idea from T-Mobile. Sprint will pay up to $350 (in the form of a Visa prepaid card) to pay off customers’ existing contracts with other providers. And in an announcement of the new pricing released late yesterday, Sprint’s recently appointed CEO Marcelo Claure said the company will “have more news coming later this week about plans for individuals.”
Sprint Wireless Pricing War
According to Claure, Sprint’s new Family Share Pack pricing is “the best value to data-hungry consumers.” Claure’s “data-hungry” adjective is an important qualifier.
“Sprint’s prices under Family Share Pack are now meaningfully lower than Verizon’s or AT&T’s at most usage levels, and they are dramatically lower than any of their competitors at very high usage levels,” wrote telecom financial analyst firm Moffett Nathanson in a research note issued this morning. “But they are still not quite as low as T-Mobile’s at most data consumption levels, and, perhaps more importantly, their lowest prices are still not available to existing subscribers.”
The Moffett Nathanson researchers expressed concerns that the limitations on the data access exemption could cause existing customers to defect, exacerbating a problem that has plagued Sprint in recent years as it struggled with network quality.
Sprint is in the process of deploying an advanced network supporting higher data rates than competitive networks – and according to yesterday’s announcement, the company plans to reach 100 million Americans by year-end with the new high-speed service, dubbed Sprint Spark. (Currently the company offers Spark in 27 markets.)
Some industry observers have argued that Sprint shouldn’t count on network enhancements to improve its competitive position but instead should cut prices. According to some reports, Sprint’s previous CEO Dan Hesse was replaced because he didn’t want to start a price war.
Prognosis
Sprint’s emphasis on high-usage customers seems to makes sense, considering that between network upgrades and customer defections, the company should have capacity available on its network. And by undercutting AT&T and Verizon but not T-Mobile at lower usage levels, perhaps Sprint will avoid triggering extreme responses that would be bad for all of the companies in the market.
Despite their reservations, even Moffett Nathanson gave Sprint a lukewarm endorsement for its new plan.
“Whether the new prices will be enough to fully stem subscriber defections remains to be seen,” the researchers wrote. “But they will certainly help.”
