Sprint's Claure reportedly plans 'very disruptive' pricing changes for next week

Sprint (NYSE: S) CEO Marcelo Claure said the company plans on introducing new, aggressively priced plans next week, according to a Light Reading report.

Marcelo Claure, Sprint

Claure (Source: Sprint)

The new Sprint chief addressed a town hall meeting of Sprint employees Thursday and reportedly told them that the company will slash prices and continue focusing on improving its network to win back customers.

"We're going to change our plans to make sure they are simple and attractive and make sure every customer in America thinks twice about signing up to a competitor," he said, according to Light Reading, saying that "very disruptive" rate places are coming next week and that Sprint will react faster to competition.

"When you have a great network, you don't have to compete on price," he said. "When your network is behind, unfortunately you have to compete on value and price." 

Sprint declined to comment on the report or on any planned pricing changes. Light Reading did not identify its source or sources for Claure's comments at the meeting, which was closed to reporters.  

Sprint spokesman Doug Duvall told FierceWireless that the meeting was held "in front of a standing-room-only crowd." 

According to Duvall, Claure "shared his passion for his family, work and soccer team and his commitment to leading Sprint. He discussed Sprint's challenges and pledged to get Sprint 'back in the game' by focusing on providing the best value in the market, completing our network build and optimizing Sprint's cost structure."

Former Sprint CEO Dan Hesse confirmed late last month that the carrier was testing new pricing plans, though he did not set any timeline for the changes. He said that Sprint's Framily plan had become less competitive at certain price points and that Sprint "may need to make some adjustments to our pricing levels based on what we learn" in the trials. Hesse also has said unlimited data for smartphones continues to be a key differentiator in the market.

CNET had reported that Sprint is testing a shared data plan in select cities, as well as discounted versions of its Framily and individual plans.

Sprint has struggled with high churn as it has completed its network upgrades, especially for CDMA voice. The carrier has pledged to return to postpaid subscriber growth in the fourth quarter but has been undercut by the more aggressive T-Mobile US (NYSE:TMUS), which has marketed itself as the "uncarrier" with low prices and offers to pay off switching customers' Early Termination Fees among other offers.

In the first two quarters of 2014, T-Mobile added 3.87 million total net wireless customers, including 2.23 million branded postpaid subscribers. Sprint lost 801,000 total net wireless customers in the first two quarters, including Sprint platform postpaid net losses of 412,000 customers.

According to Light Reading, Claure did not describe the pricing changes in detail but said he wants dealers to be aggressive in promoting them once they are announced and vowed they would have the resources to do so, unlike in the past.

Claure also said that while Sprint is facing challenges, especially on its network upgrades and its negative perception on social media, the carrier has a strong spectrum position and can challenge industry leaders Verizon Wireless (NYSE: VZ) and AT&T Mobility (NYSE: T), but that it will take time.

Beyond cutting prices, Sprint aims to use its network to differentiate itself. The key element of Sprint's tri-band LTE Spark network strategy is to use its vast trove of 2.5 GHz spectrum for TD-LTE services to deliver superfast speeds. Sprint aims to have 100 million POPs covered with 2.5 GHz LTE by the end of 2014 and use two-carrier carrier aggregation on its 2.5 GHz spectrum to produce peak downlink speeds of more than 100 Mbps. To access that though, some Sprint customers will need to get new smartphones.

Sprint is also working with Qualcomm (NASDAQ:QCOM) to accelerate the launch of devices that can take advantage of three-carrier carrier aggregation on its 2.5 GHz TD-LTE service. Those devices will start being seeded into the market in the first half of 2015 instead of the second half of next year. Sprint plans to deploy three-carrier carrier aggregation on its network by the end of 2015, producing peak speeds of 150-180 Mbps.

"I want to make sure we're the incumbent challenger," Claure said, according to Light Reading. "We don't want the status quo." 

Claure also reportedly acknowledged that some job cuts are inevitable as Sprint reevaluates its priorities and cost structure, but did not say how large any cuts might be.

Referring to Sprint's aborted plans to merger with T-Mobile, Claure said he and SoftBank CEO and Sprint Chairman Masayoshi Son "spent days and nights talking about the merger I'm not supposed to talk about," and ultimately decided it was not the best decision to make while Sprint was making a leadership change. The deal also faced strong--and mounting--opposition from regulators, particularly at the FCC, which many reports have said was the ultimate reason Son pulled the plug on the deal.

For more:
- see this Light Reading article
- see this Kansas City Star article
- see this Kansas City Business Journal article

Related Articles:
Lowenstein's View: Memo to new Sprint CEO: How to turn things around
Sprint's Claure intends to cut costs, compete aggressively on price
Sprint CEO Claure takes the reins with great expectations - and challenges - ahead
SoftBank's Son predicts rising U.S. price competition, calls Claure a 'street fighter'
Sprint's new CEO, Claure, seen by Son as natural choice to succeed Hesse
Will the collapse of the Sprint/T-Mobile merger usher in a U.S. price war?
Can Marcelo Claure reinvent Sprint?