Sprint (NYSE: S) is escalating its pricing battle with Verizon Wireless (NYSE: VZ) and AT&T Mobility (NYSE: T), and is offering to halve the monthly rate plans of customers who switch from those carriers and buy a new Sprint phone.
Starting Dec. 5, Sprint said that under its "Cut Your Bill in Half Event," it will offer customers unlimited voice and texting and match their data allowance for half the cost they are currently paying.
For example, a Verizon More Everything plan with four smartphones and 10 GB of shared data that costs $240 would get cut down to $120 on Sprint--but customers would need to buy new Sprint phones. To mitigate the cost of switching, Sprint will pay up to $350 per line via a Visa prepaid card to cover the cost of customers' Early Termination Fees or installment bill balance when they switch.
Sprint's offer is scheduled to end of Jan. 15, 2015, but spokesman Mark Elliott said the company is open to extending it. Sprint said customers will be able to keep the half-off rate price as long as they remain on the plan.
The offer does not apply to existing Sprint customers and is also noticeably not targeted at T-Mobile US (NYSE:TMUS). That could be because T-Mobile does not offer shared data plans (which tend to escalate in price as data buckets increase), but also because T-Mobile's rates are already inexpensive. Since taking over in August, Sprint CEO Marcelo Claure has also targeted Verizon and AT&T specifically, with shared data plans that offer double the data allotments of those carriers' similar plans for the same price.
Sprint's Claure hinted at the offer a few weeks ago at an investor event. "Best value doesn't mean you are going to be the cheapest," he said at the time. "Best value means the customer is going to get their money's worth. ... I can tell you, you ain't seen nothing yet." Claure also hinted at the new plans in a post on Twitter Monday night: "Especially designed for Verizon and att customers who love to save money," he wrote.
There are several caveats to the new offer from Sprint. The discount does not apply to certain charges such as taxes, surcharges, add-ons, apps, premium content other charges. Customers need to visit sprint.com/halfprice to upload a copy of their current bill. They must also bring a copy of their latest bill and all of the phones on their Verizon or AT&T account to turn in to a Sprint store.
Then, a Sprint representative will help them pick the service plan that most closely matches the data allowance in their current monthly rate plan. Customers then will buy a new phone either via Sprint's leasing options, Sprint's Easy Pay installment billing or pay full retail price for the device.
As Re/code notes, the new plans could become a headache for Sprint's customer care and retail sales as they work to process switchers and find the appropriate new half-priced rate plan for customers. The report said that training for Sprint's store workers will begin later on Tuesday, just a few days before the new offer goes into effect.
Elliott told FierceWireless Sprint is enhancing its back-end billing systems to ensure that the switching process is smooth and easy for customers.
Asked why Sprint is not targeting T-Mobile with the new offer, Elliott said that Sprint's focus is on "being the best value" to customers.
"We have a variety of other offers in the marketplace to help attract customers from any of our competitors as well as those new to the wireless space," he said.
- see this release
- see this Re/code article
- see this WSJ article (sub. req.)
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