Sprint is taking aim at Verizon by cutting the price of its so-called “unlimited” plan during a four-day promotion. And T-Mobile may suffer some collateral damage.
The nation’s fourth-largest carrier is offering its unlimited data, talk and text plan for $50 a month, knocking $10 off the regular price. The move also undercuts Verizon’s latest promotion, which is available for a limited time and offers 5 GB a month for $55. Sprint continues to offer a second line for $40 a month more; additional lines are $30 each.
Sprint Chief Marketing Officer Roger Solé took a page from the playbook of T-Mobile CEO John Legere, taking to the company’s blog to taunt Verizon directly.
“Welcome to 2017, Verizon,” Solé wrote. “No one wants to watch a data meter and change their habits to meet your plan restrictions. Mobile video data traffic is doubling every 18 months, indicating its importance to wireless consumers. Wireless customers are using their smartphones more than ever, especially as we let go of traditional landline phones. Almost half of all U.S. households rely fully on mobile phones and have cancelled their landlines.”
Indeed, Verizon has been vocal in its opposition to unlimited plans; one former executive said several months ago that “You cannot make money in an unlimited video world.”
But that stance may be softening, Verizon CFO Matt Ellis implied earlier this week. “We constantly look at what’s out there,” Ellis said during the carrier’s earnings call. “Unlimited is one of the things that some of our competition has at this point in time; that’s not something we feel the need to do. But as I say, we continually monitor the market and we will see where we head in the future.”
It still isn’t clear how financially sound the unlimited model is, however. Sprint and T-Mobile both announced their unlimited plans in August, and T-Mobile doubled down on the model earlier this month when it began including taxes and fees in the price. MoffettNathanson was quick to downgrade shares of T-Mobile from buy to neutral, citing concerns about the overall wireless market as data consumption soars but prices plummet.
Sprint is likely to steal some customers from both Verizon and T-Mobile if it’s backed by a notable marketing campaign, and the short time frame ensures Sprint’s network won’t be jammed with ravenous users accessing data on the cheap. But the promotion is the latest indication U.S. carriers may be engaging in a race to the bottom in terms of basic wireless services for consumers.