As promotional pricing ends, some Sprint customers to see bigger monthly bills

Sprint 50% off promotion (Sprint)
Sprint announced its “50% off” promotion in November 2015, offering to cut 50% off the price of most Verizon, AT&T and T-Mobile rate plans. (Sprint)

Two of Sprint’s major promotional pricing offers—its “unlimited freedom” and its “50% off” promotions—are soon scheduled to end, which will result in a bigger monthly bill for some Sprint customers.

“Customers on Unlimited Freedom and 50% off were informed when they signed up with Sprint that the plans were introductory pricing and would increase in price at a future date,” Sprint’s Kathleen Dunleavy wrote in response to questions from FierceWireless on the topic. She added that Sprint also reiterated the expiration dates through a number of subsequent customer messages. “The great news is these customers are still paying less for their service compared to other major carriers. Plus, Sprint now provides unlimited customers Hulu at no additional cost. Sprint is very competitively priced and customers can call Sprint at 1-800-SPRINT1 if they have additional questions.”

Dunleavy also pointed out that the carrier’s expiration date for the promotional pricing is dependent on when customers initially signed up for the limited-time promotions.

Sprint announced its “50% off” promotion in November 2015, offering to cut 50% off the price of most Verizon, AT&T and T-Mobile rate plans. The carrier said at the time that the pricing would remain valid “until Jan. 8, 2018, for activations between Nov. 20, 2015, and Jan. 7, 2016.”

As for the carrier’s “unlimited freedom” offer, it provided five lines of unlimited data, talk and text for around $20 per month per line. “After Jan. 31, 2018, customers pay the additional $30 per month for those lines,” the carrier warned at the time.

The end of Sprint’s promotions was initially noted by Wave7 Research, which closely tracks wireless carriers’ pricing offers. The firm said that Sprint would soon begin contacting roughly 300,000 customers about the Jan. 31 expiration data and then more after that. Those pricing changes may well cause customers to cancel their Sprint service, leading to higher churn at the carrier.

Indeed, some Wall Street analysts have already been increasing their fourth-quarter expectations for Sprint’s churn. “At a conference in December, S’s CFO indicated churn would be up ~ 15bps vs. prior quarter,” wrote Wells Fargo analyst Jennifer Fritzsche in a note to investors issued this morning. “As a result, we are increasing our postpay phone churn to 1.74% vs. 1.65% prior (1.59% in FQ2). We are also lowering our postpay upgrade rate to 7% vs. 9% prior—as checks show upgrade rates were lower than expected in Q4 (T’s CFO noted this trend at a competitor conference).”

Analysts at Jefferies made similar comments last week: “Given recent management commentary, we raise our postpaid churn to 1.85% (from 1.78%) to better reflect recent pricing actions (+$10 for new customers) and seasonality. Together with lower gross add expectations, we lower handset net adds to 200k (365k prior), below consensus.”

The end of Sprint’s promotional offers comes just days after Sprint’s chief executive, Marcelo Claure, announced that he will replace Sprint’s CFO with Michel Combes, the former head of French cable company Altice.