Sprint's (NYSE: S) on-and-off relationship with two-year customer contracts appears to be off. Again.
Android Central posted what appears to be an internal Sprint document informing retail staffers that it will stop offering contracts and subsidized handsets for new accounts beginning this Tuesday. Instead, it will push its lease program and equipment installment plans (EIPs) as well as allowing customers to buy devices outright at full price.
It's unclear whether Sprint will continue to allow existing customers to upgrade their devices through a two-year contract. A Sprint spokesperson declined to say whether the carrier plans to kill contracts next week. "We continue to evaluate and update our offers as needed to ensure we are meeting the shifting needs of our customers," she wrote via e-mail.
The move would continue Sprint's fluctuating support of customer contracts, which have largely fallen out of favor among both consumers and carriers. Sprint CEO Marcelo Claure said last August that the operator would abandon contracts by the end of 2015 in favor of leasing handsets, and Sprint finally killed contracts in early 2016.
But it resurrected contracts just several weeks later. "We listened to our customers and are giving them more choices to get their new device," one Sprint representative said at the time.
Interestingly, the news comes just one day after Verizon CFO Fran Shammo reported seeing unexpectedly high demand for contract-based services from customers who had already been under contract. Verizon users who are already on contract plans are largely opting to re-up rather than move to an EIP, Shammo said. Specifically, Shammo said roughly 68 percent of Verizon's sales in April were on EIPs, below the carrier's expectations.
"The pressure for us on the installment take rate (is that) we are still allowing our base to choose the subsidized model, and on upgrades, believe it or not, a majority of the people are still upgrading and selecting the subsidized model," Shammo said. "That's why we're having the pressure on the installment plan."
For more:
- see this Android Central report
Related articles:
Verizon's Shammo: EIP take rate 'not getting there,' stuck at around 68%, below expectations
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The end of the two-year service contract: Sprint, AT&T join Verizon, T-Mobile in dropping contracts
Two-year contracts disappear as EIP surges - Year in Review
Report: AT&T to abandon 2-year contracts at national retailers and local dealers
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Updated Friday, May 5, to include comment from a Sprint representative.