Sprint's new CEO Marcelo Claure has made good on his promise to get aggressive on pricing in an effort to draw new customers to the fledgling wireless operator.
On Monday the company announced its first ever family share plan it calls the Family Share Pack that will double the amount of data subscribers get for the same price as its competitors. To attract new customers to the network, the company also introduced two new promotions that provide even more data for the same price as the competitive offerings. And it stole a move from T-Mobile's playbook with an offer to reimburse customers for early termination fees if they switch to Sprint.
The move, orchestrated by Sprint's new CEO, is meant to turn things around for Sprint, which has steadily been losing customers every quarter. Claure, who joined Sprint's board in January, stepped into the chief executive suite only a week ago. He took over for Dan Hesse, who left the company after Sprint abandoned plans to acquire rival T-Mobile. Claure, who is said to have a close relationship with Masayoshi Son, Sprint's chairman and CEO of Sprint's parent company Softbank, told employees last week that the company would waste no time in slashing prices to respond to competitive threats.
Staying true to his word, the company revealed details of this new plan on Monday evening. Rather than simply slashing prices, the company is leveraging its high-capacity data network to offer consumers more value. The company had been testing family share plans in certain markets, which CNET first reported in July.
"The focus (of the new plan) is on giving away more data for the same price, rather than lowering prices per se," Jan Dawson, chief analyst at the independent research firm Jackdaw, said in a note Monday evening. "And with all the capacity available on the Sprint network, Sprint can afford to do so."
The new pricing plan and promotions finally put Sprint, which lost 220,000 customers in the second quarter of 2014, in a position to compete more aggressively with its competitors and win over new subscribers.
"Sprint is offering the best value to data-hungry consumers. Period," Claure said in the press release announcing the new service and promotions. "We want customers to think twice before choosing another wireless carrier."
While Claure's intentions to grow Sprint's subscriber base with plans that offer more bang for the buck will likely result in some short-term subscriber growth, the execution of these plans and promotions may leave many consumers scratching their heads trying to figure out how all the amazing promises of lower prices and better values really adds up.
The pricing plan, in conjunction with the special promotions that apply only to new subscribers and will last only through the end of 2015, are complicated and hard to decipher. That said, a closer look at what's being offered shows that Sprint could become the value leader in the industry, beating out the current wireless golden child, T-Mobile. Of course, consumers will only make the leap to Sprint if they can figure out how the plans and promotions work.
"The new pricing plans are somewhat complex," admitted analyst Dawson. "And so the overall impact is a little more complicated than Sprint's 'double the data' headline suggests. However, it's undoubtedly a better deal for most customers than competitors' equivalent data plans."
What are the plans?As part of the Family Pack, Sprint has finally embraced the share model that AT&T and Verizon introduced more than two years ago. This model allows consumers to buy a "bucket" of data, which also bundles unlimited texting and calling, and then customers pay to add additional lines or devices to the data plan.
