Sprint's Claure: 50% off promotion likely to last through the holidays

Marcelo Claure
Sprint CEO Marcelo Claure

Sprint plans to drop its 50 percent off promotion, CEO Marcelo Claure said once again this morning, in an effort to streamline its offerings into three simple price plans. But that isn’t likely to happen until after the holidays.

The nation’s fourth-largest carrier introduced a half-priced billing promotion late in 2014 for users who switch from Verizon or AT&T, and last year it doubled down on the effort by offering to cut the rate plans in half of customers who switch from any of its three bigger rivals. The move has proved effective at luring customers but has come at a cost: Sprint posted 173,000 net postpaid phone additions in the second quarter of 2016, for instance, but also suffered a net loss of $302 million.

Meanwhile, both Sprint and T-Mobile recently launched new unlimited plans in an effort to poach customers from Verizon and AT&T. Sprint's new $60-a-month unlimited data plan places limits on the speeds of video, music and gaming, and more recently the carrier added a premium unlimited plan for higher-quality multimedia.

Claure told attendees at an investors’ conference this morning that the carrier will eventually move to three plans: The two unlimited offerings as well as an entry-level plan for low-end users.

“I’m not sure I want to get off the 50 percent off (plan) through the holiday season,” he said. “We’ll figure it out after the holiday season, because I think we have a really good value proposition.”

And while the half-off promotion has been effective, Claure said the carrier's new unlimited plans are also gaining traction with users who simply want more data than their current plans allow.

“A lot of the customers who come, they don’t want 50 percent off, they want to pay what they’re already paying but they want to be able to get double or two and a half times (as much) data” than they currently use, he said. “That obviously helps in terms of bringing customers” with higher ARPU than those who take the half-price deal.

Claure also said Sprint is already beginning to reach out to subscribers whose two-year contracts under the half-price promotion are coming to an end. The carrier is telling those customers to expect their monthly bills to increase, and is urging them to sign up for Sprint's new unlimited offerings.

“One thing that we’ve done is we message you every month and say, ‘Hey, you’re in a promotional rate’” that will soon come to an end, Claure said. “I think most people are going to move toward unlimited, and that is very accretive for Sprint.”

Related articles:
Sprint doubles down on unlimited with high-end plan with HD video
Unlimited plans from T-Mobile and Sprint are compelling, but analysts say network concerns remain
T-Mobile, Sprint pit new unlimited data plans against one another
Sprint posts 173K postpaid phone net adds, $302M net loss
Sprint’s shrinking spending drags U.S. wireless capex down 10% in Q2