Sprint (NYSE: S) is going all out to woo customers from its competitors this holiday season. The carrier said it will cut the rate plans in half of customers who switch to Sprint from Verizon (NYSE: VZ), AT&T Mobility (NYSE: T) and T-Mobile US (NYSE:TMUS), and the savings will last through 2018. Sprint will also offer existing customers one year of free service for an Alcatel OneTouch PIXI 7 tablet with a two-year contract, while supplies last.
Sprint is essentially expanding upon on its "Cut Your Bill in Half" offer, which it launched a little more than a year ago and aimed at just Verizon and AT&T customers. Since then, T-Mobile has surpassed Sprint as the No. 3 carrier by subscribers and Sprint and T-Mobile have engaged in a series of offers and counter-offers, especially on phone leasing offers and promotions.
The new Sprint offer takes effect Nov. 20 and will run through Jan 7, 2016. The savings will last through Jan 8, 2018. Sprint said switching customers would need to port their number over. Customers do not need to trade in their phones under the offer, but they do in order to take advantage of Sprint's offer to pay up to $650 per line via a reward card to cover Early Termination Fees and remaining phone payment balances. Customers who do buy a new phone from Sprint must do so through the Sprint Easy Pay equipment installment plan or lease a new phone through Sprint Lease.
"The time has come when our network is reaching an all-time high performance and we expect it to only get better and better from now on," Sprint CEO Marcelo Claure said on a conference call with reporters. As a result, he said, Sprint wanted to do "something that persuades American consumers to give us a try, to take a closer look at what we have to offer."
Customers have 28 days to experience Sprint service. If they are not satisfied, Claure said, customers can return their device with no restocking fee and for full credit, "no questions asked."
"We feel very confident that T-Mobile, AT&T and Verizon customers, when they look at the price difference of what exists in the market today, and a very simple, straightforward, 50 percent off offer, I believe we're going to have a lot of customers come and give a chance to Sprint," Claure said.
The new offer is also much simpler than the original half-off offer, Claure said, because only certain rate plans from competitors will be cut in half. Before, Sprint had to analyze "hundreds and hundreds" of AT&T and Verizon rate plans with different discounts in order to cut the bill in half. "We've trained our sales people, we've tested the systems, and this is actually going to be much faster than the previous execution," Claure said.
Claure also said that the new promotion will not hurt Sprint's financials because it will increase its subscriber rolls. "We've done a tremendous amount of analysis to show that assuming that we're able to increase our sales as we plan, this is going to be very financially accretive for Sprint," he said.
According to Sprint, for T-Mobile customers, the discount offer is limited to T-Mobile's advertised "Simple Choice" rate plan prices as of Nov. 16, for 2 GB, 6 GB and 10 GB for non-discounted handsets only, with tablet and mobile broadband rate plans excluded. T-Mobile's unlimited data rate plan is excluded from the offer. The discount on Verizon plans is limited to Verizon's advertised shared data rate plans as of Nov. 16 for 1 GB, 3 GB, 6 GB, 12 GB, 18 GB, 20 GB and 25 GB for non-discounted handsets, tablets and mobile broadband devices. And the discount for AT&T is limited to AT&T's advertised shared data rate plans as of Nov. 16 for 300 MB, 2 GB, 5 GB, 15 GB, 20 GB and 25 GB for non-discounted handsets, tablets and mobile broadband devices.
As an example, Sprint said a T-Mobile customer with a 10 GB/$80 per month plan can get unlimited voice and texting with the same amount of data for $40 per month. The carrier also said an AT&T family on a Mobile Share Value plan paying $100 per month for 15 GB at AT&T can get the same amount of data for $50, and customers also save 50 percent on their per line access fee. Additionally, Sprint said Verizon customers paying $80 for 12 GB of data will pay $40 for 12 GB if they switch to Sprint, and they will also save 50 percent on the per line access fee.
In terms of the free year of service on the tablet for existing customers, once the year is up customers will pay $10 per month for the tablet if it is part of a Family Share Pack shared data plan or will be put on a $15/1 GB plan.
The new promotion is a continuation of Sprint's efforts to get customers to switch to the carrier. Earlier this year Sprint offered a year of free service to DirecTV customers who switched over (AT&T owns DirecTV).
Sprint is planning to cut up to $2 billion in operating expenses, plans to slash thousands of jobs and is reorganizing its sales teams to focus on local markets across the country. Yet the company clearly hopes to keep its subscriber momentum going. During the third quarter, the carrier gained postpaid handset customers on the Sprint network, the first time it had done so in a full quarter in more than two years.
Earlier this month, when it reported quarterly earnings, Sprint said that based on October results, it had seen positive postpaid phone net additions for six consecutive months, a streak not seen in nearly three years. However, the mark of hitting postpaid handset subscriber additions for the first time in more than two years excludes Nextel/iDEN subscriber losses. (Sprint finally shut down the iDEN network in June 2013 but had significant iDEN subscriber losses before then).
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