Sprint has unveiled one of the most aggressive wireless promotions yet, offering unlimited data, talk, and text for just $15 per line per month. The offer is for people who are switching to Sprint from another carrier. It can only be activated online, and does not require a contract.
By undercutting its competitors on price, Sprint is making several points. First, the carrier appears confident that its network can handle a lot more traffic and perform as well as those of its competitors. Second, despite a major investment in new Sprint retail stores across the country, Sprint would rather sign up its new customers online than in person. Third, Sprint is not content to languish in fourth place in the U.S. market while it waits to see if U.S. regulators will approve its merger with T-Mobile next year.
And finally, Sprint is underlining the point that a wireless market with four operators invites aggressive price promotion. Washington wants to see a competitive wireless market, but it doesn't necessarily want to see carriers cutting prices to a point that threatens their ability to invest in next-generation networks.
The Sprint network has been the up-and-comer in the U.S. market for many months as the carrier works to deploy all three of its spectrum bands: 850 MHz, 1900 MHz, and 2.5 GHz. Its new CEO Michel Combes recently told an audience at an investor conference that Sprint is "entering in 2018 to win meaning parity in 4G, leading 5G. ... don't expect any slowdown in our strategy from a network point of view."
The carrier says its national average download speed has increased 34.5% since last year. Sprint's message to U.S. consumers now is that all networks are fast and reliable, so why pay more when you can get everything you need from Sprint?
By offering its new plan online only, Sprint will reduce the cost of activating new lines and adding new customers. In order to take advantage of the carrier's offer, customers need to sign up online and enroll in AutoPay.
The latest price promotion is proof that Sprint is determined to grow its subscriber base while it waits to find out whether it is going to merge with T-Mobile. Sprint had 53.6 million subscribers at the end of the first quarter, which is 20 million less than T-Mobile and less than half as many as Verizon and AT&T each have.
The promotion also underscores the cutthroat nature of a four-carrier wireless market. Some analysts say a three-carrier market is likely to result in fewer discounts for customers. This is a negative for consumers in the short term, but could be positive in the longer term, according to some analysts.
Analyst Joe Madden of Mobile Experts has pointed out that in countries with just three carriers, higher margins create the financial opportunity for carriers to invest in new technologies, which ultimately lead to more value for consumers. Consumers may not see rock-bottom data prices, but they are able to get a lot more data for each dollar they spend. This is the type of argument that will almost certainly be made in Washington as the Justice Department and the FCC consider the proposed merger of Sprint and T-Mobile.