NEW YORK--Sprint (NYSE: S) decided to introduce new shared data plans for families with large data buckets because it felt its spectrum position and network resources allowed it to do so in a way that would set it apart from the competition, according to a senior Sprint executive.
The carrier's new rate plans, which offer double the data of similarly-priced plans from Verizon Wireless (NYSE: VZ) and AT&T Mobility (NYSE: T), are the first major move by new CEO Marcelo Claure to shake up Sprint's business since taking the helm last week. Financial analysts have said they are skeptical the new plans will be disruptive enough to revive Sprint's fortunes.
However, in an interview with FierceWireless ahead of a media event here, Sprint's David Owens said the company is confident it is bringing real value to consumers and that it's network can handle large data loads.
"We were very thoughtful about, as you look at our spectrum position, we believe that our spectrum position allows us to take a more aggressive stance in offering more data," said Owens, Sprint's senior vice president of product development.
Sprint's plans, which are called Family Share Pack and will be available starting Aug. 22, are designed to target price-conscious customers as well as families, Owens said. Families rack up large bills for wireless service every month, and even if a mother or a father might be a light data user, their kids could be data hogs, he said, especially for video services.
"We wanted to have a great value for the consumer that gives them predictability in their billing and comfort that they are not going to go over their data bucket," he said. The plans are targeted not just at smartphone users but are designed to encourage the adoption of tablets and other mobile data devices, as other shared plans are.
Owens said families are the key though. "The idea is the bulk of your population in the postpaid business are on family plans," he said. "For us to be successful we have got to be able to attract and actually switch families."
The biggest hurdle Sprint now faces is the perception--and to some, the reality--that its network is not up to par with its competitors. According to a new report from independent network testing firm RootMetrics, Sprint placed last among the four Tier 1 carriers in overall national network performance, data performance, network speed and call performance for the first half of 2014. Sprint is trying to remedy that through the completion of its 3G CDMA network upgrades as well as the rollout of Spark, its tri-band LTE service, which Sprint says delivers peak data speeds of 50-60 Mbps right now and will deliver 100 Mbps by the end of the year through two-carrier aggregation on its 2.5 GHz TD-LTE service. However, Spark is only available in 28 markets right now, though Sprint aims to cover 100 million POPs with Spark by the end of the year.
Owens said that provides Sprint with an opportunity. "I would tell you our network is getting better every day," he said. "And we see it in the metrics."
"What we're confident of is the build, and the deployment that we're making with Spark will provide us [with] a network that customers will absolutely love," Owens said. He said customers can get broad coverage with 1900 MHz spectrum, inbuilding penetration with 800 MHz spectrum and fast speeds and network capacity with 2.5 GHz spectrum. The issue is that with Sprint's 1900 MHz deployment, it is using only a 5x5 MHz block of spectrum, which does not allow for faster speeds, and because of the weak prorogation characteristics of 2.5 GHz spectrum it takes more network infrastructure to build out network coverage in that band.
Owens said Sprint put in place the rate plans with the expectation that its network will only improve. "As Marcelo looks to the future, he looks and says, 'My network is only getting better, and it's getting better remarkably fast. And so the opportunity for me is to put in place these rates plans where I'm providing more value and my network is going to get better, and that consumer is only going to have a better experience.'"
Owen added that "there's already acceleration plans the network team has put in place," and that while Sprint's 1900 MHz LTE service now covers 254 million POPs, "we are very aggressive with 800 and 2.5 and moving that into our plans to really deliver Spark throughout the network."
The Sprint executive also touched on Sprint's planned launch of the Sharp Aquos Crystal smartphone, which it will sell sometime in the near future (an exact launch date hasn't been set) for just $239 without a contract. Sprint will also sell the phone for 24 monthly payments of $10 via its device financing program, and its Virgin Mobile and Boost Mobile brands will sell the phone for $149.99.
Owens explained that the phone arose from meetings among SoftBank CEO Masayoshi Son, Claure (who was then head of wireless device distributor Brightstar Corp.) and former Sprint CEO Dan Hesse. The executives met with numerous OEMs and decided to partner with Sharp, which had a strong relationship with SoftBank in Japan but no relationship with Sprint.
The Aquos Crystal features a 5-inch HD edge-to-edge screen, 1.2 GHz quad-core processor, Spark technology, Wi-Fi calling, HD Voice, Harman Kardon's LiveStage and Clari-Fi audio technology, an 8-megapixel rear camera and 1.2-megapixlfront-facing camera.
The goal, Owens said, was to build "an iconic product but put it in the value category." He said SoftBank and Sprint will announce more joint products that leverage their combined scale, calling it an "evolutionary" process.
Additionally, Owens said that Sprint's new App Pass program, which will give users unlimited access to a select catalog of applications and games for $5 per month, builds on a subscription model that is popular in Japan but less so in the U.S. Partnering with Mobiroo, a Canadian company founded in 2009 that develops and manages app subscription platforms globally for Android, Sprint will populate the curated store with "hundreds" of apps that will be continually refreshed, Owens said. Sprint will be targeting enterprise apps, "up and coming" apps that want to have a new platform for reaching consumers and games with in-app purchases, since customers will also get a $5 credit each month to spend on in-app purchases.
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