Sprint raises stakes in the $99.99 unlimited battle
Sprint Nextel upped the ante in the $99.99 all-you-can-eat rate plan battle Thursday by introducing a service that includes unlimited voice as well as unlimited data and slew of premium services.
Called "Simply Everything," the plan will give customers unlimited voice as well as unlimited data, text, e-mail, Web-surfing, Sprint TV, Sprint Music, GPS Navigation, and push-to-talk service for $99.99 a month. The company made the announcement during its fourth-quarter earnings call, in which the company also announced heavy financial and customer losses.
The new pricing plan is available to existing and new customers on both Sprint's CDMA network as well as its Nextel iDEN network starting on Friday. Current customers will not have to renew or extend their contract to switch to the service.
Sprint is also offering discounts for families subscribing to the high-end rate plan. Families will get a discount of $5 per month on every "Simply Everything" service that is added to the same bill for up to five additional lines. This means that two lines would cost $194.98 (or $99.99 plus $94.99). A third line would cost an additional $89.99.
Sprint is facing stiff competition. Last week, Verizon Wireless was the first to announce a $99.99 unlimited voice plan followed by AT&T and T-Mobile. Until Sprint's plan was announced, T-Mobile seemed to offer the most comprehensive offering--a $99.99 plan that includes voice, unlimited text messaging and picture messaging.
AT&T's plan is only for unlimited voice calls. AT&T customers can get additional messaging plans starting at $5 more a month with an unlimited messaging plan costing an additional $35 a month on standard phones.
Verizon's $99.99 plan includes unlimited voice and Internet access, and Web-based email. Customers can tack on additional services for a fee. For example, for $119.99-per-month, Verizon Wireless customers can get unlimited messaging. And for $139.99-per-month, they can get VCast video, VZ Navigator, and Mobile E-mail functions.
Clearly Sprint's offering offers customers the most bang for the buck. But some analysts have warned that if Sprint significantly undercut or added more services to the bundle for the same price that they could start a price war in wireless.
Dan Hesse, the company's CEO who took over the top spot at Sprint just before the end of 2007, said the new rate plan is not about matching competitors on price. Instead, he said, it's about making it simpler for customers to buy and use data services. And he hopes it will help differentiate Sprint from its competitors.
"The new battleground will be around data," he said during the earnings call on Thursday. "We want to put a flag in the ground that we are about data."
He also went on to say that the company has a long road ahead of it as it tries to put its failing business back on track.
" I want to emphasize that this is not a silver bullet," he said. "This ($99.99 pricing offer) is one of many actions we will take to turn things around for the company."
Indeed, Sprint has been suffering from massive customer defections as dissatisfied customers flee due to poor network performance and unhappiness with customer service. In the fourth quarter of 2007, Sprint lost 683,000 customers. And it expects more losses in 2008. It forecast that it would lose an additional 1.2 million customers who pay monthly bills in the first quarter of 2008. And the losses will continue in the second quarter, Hesse said.
"The major objective for us is to reduce churn by improving the customer experience across all touch points," he said. "That is the No. 1, 2, and 3 things we need to focus on."
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie.
They're still missing out on opportunities by not promoting it themselves.
Their website says nothing about it.
Now all they need is better phones, better customer service, a better web site, and slightly improved coverage.
for sure.
And when that happens, we'll begin to see providers offering all
the $99.00/month services for $49.99 a month.
It's going to take a while, but it's going to happen.
What I'm REALLY waiting for is Wi-fi coverage everywhere.. then
we can all ditch the different networks for ONE. VOIP will rule.
What the hell does that mean. Analysts think that a more services for less money is bad for us consumers!? Sorry for the flaming but that is the stupidest comment I've heard lately from an "Analyst"
Correct me if I'm reading this quote wrong.
The turth is that we would have gotten here eventually. It won't surprise me if, in a year or two unlimited voice and data on mobiles is just a bit more than landlines.
I think we are all hoping for a price war. If we lose a carrier in the
process then so much the better. They all have basically been
prison-raping us since the wireless industry started.
Those wagering against Sprint's success need to place their bets carefully. Unlike AT&T and Verizon, who have a significant terrestrial (land line) businesses, Sprint has no such liabilities. If AT&T and Verizon decide to continue the price war, they will wind up further cannibalizing their own land line business. All this at a time when they are investing heavily to build out their networks with fiber to compete with the Comcast and other cable companies.
T-Mobile's HotSpot@Home Talk Forever offering is another potential loser in the unlimited use price war. Even with their new $9.99 p/month price point, the limited number of phones and WiFi hotspots that support this service, make it available to only a small minority of cell phone users.
Although it will take some time for us to see the true impact of this "war" on the major cell service providers, including Sprint, the negative fallout for Helio could be much quicker. Helio has based its "success" on providing unlimited data and optional unlimited voice services, delivered via Sprint's network and bundled with unique, high-end devices that are optimized for data (chat/web) functions. They are now faced with the uphill battle of convincing potential customers that their uber-phones make it worth dealing with a boutique vendor, while seeing the margins that subsidize that hardware drop to razr (pun intended) thin levels.
As attractive as the new pricing is, Sprint's new chief executive, Daniel Hesse, still has his work cut out for him. The Nextel merger has been a disaster and due to a hemorrhaging of Sprint/Nextel customers, the company's stock price and balance sheet is in the toilet.
To succeed/survive, Sprint needs to give up on Nextel and focus all their energy into transforming their retailer base into Value Added Resellers (VARs). As long as they continue to sell only the commodity of the connection and subsidized phones, they will have little to differentiate them in the market.
A VAR approach to the market would focus on positioning their new unlimited plan as a home/SMB phone replacement. A great solution to make this possible is the XLink home phone gateway. This device allows you to use your home phone handset(s) with your cell phone's service, to take and make calls using your cell phone number. The VAR strategy also means selling software and training.
Their are literally thousands of software programs for the Palm, Windows Mobile, Blackberry and Web 2.0 platforms like LinkedIn, Facebook, etc, from games and diet management programs to sophisticated medical information applications. Every software program sold to a PDA or smartphone user has the potential to add $5.00 - $150 to the bottom line and unlike cases & chargers, be a recurring source of revenue. Technical training, a $48.7 Billion market, is another potential high profit area. Teaching companies or even individual customers how to use the latest generation of PDAs and smartphones with always-on data services for calendaring, scheduling, project management or even remote access could be a highly lucrative business.
It will be interesting to see how the new unlimited "price war" progresses. One thing is almost certain, the consumer is going to be the ultimate winner!
http://digitalpipedreams.blogspot.com/
Go Sprint. I wish I could switch.
-
by wmanello
May 7, 2009 5:38 AM PDT
- idiots they dont use java on phones and there 3G network sucks Verizon has 5 times the coverage and Verizon owns all there towers which is why Sprint sucks in the first place. You people don't have a clue
-
Reply to this comment
-
(21 Comments)