Sprint (NYSE: S) CEO Marcelo Claure is expecting strong December sales thanks to a new promotion Sprint launched on Friday to cut customers' service bill prices in half if they switch from Verizon Wireless (NYSE: VZ) or AT&T Mobility (NYSE: T) and buy a new Sprint phone.
"We're looking for one of the best Decembers Sprint has ever had," Claure told reporters at a Sprint retail store on Friday in Leawood, Kan., right near the company's headquarters in Overland Park, according to the Kansas City Star. "I think we sent a very strong message to Verizon and AT&T."
Claure said at an investor conference last month that Sprint will have a "good" fourth quarter compared to the fourth quarter of 2013, when Sprint added 477,000 total wireless subscribers. Claure said the company is building on a "record" launch of the iPhone 6 and expects 12 percent of Sprint's customers base to upgrade their phones in the fourth quarter, which would be the largest percentage ever in a quarter for the company.
Under the promotion, which runs through Jan. 15, Sprint is offering Verizon and AT&T customers unlimited voice and texting and match their data allowance for half the cost they are currently paying. Customers need to purchase a new phone for each line either via Sprint's leasing options, Sprint's Easy Pay installment billing or pay full retail price for the device. 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.
Last week at an investor conference, Sprint CFO Joe Euteneuer said that because customers need to go on a leased phone or an installment billing plan, the net discount customers can expect is around 20 percent under the new promotion. He said that the promotion will be a "great value creator" for Sprint.
Verizon customer Rusty Smith went into the Leawood store to switch to Sprint after hearing about the offer from a Sprint employee, and he wound up speaking with Claure. "He asked why we were moving over," Smith told the Star.
In the end, Smith did not wind up switching to the new promotion and instead went with a lower-cost deal with unlimited data and a leasing agreement for the iPhone 6.
Claure said that Smith's decision is fine with him. He noted that the promotion is designed to get customers back in Sprint stores, where they may find a better deal than the half-off promotion.
The promotion is one of several steps Claure is taking to reinvigorate Sprint. Another one is cutting costs, and Claure has already said Sprint is shedding a further 2,000 employees as part of a plan to cut costs by $1.5 billion.
"We have to be leaner. If you want to have the best value in wireless, you have to have the customers to serve, and we have to make some adjustments," Claure said, according to local station KSHB. Claure said that now that Sprint has announced job cuts he will do everything he can to make the company more profitable.
- see this Kansas City Star article
- see this KSHB article
- see this KCTV article
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