July 6, 2007 3:46 PM PDT
Splitting up with your cell phone carrier
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That breaking point could be lower for Sprint than for some of its competitors. While other wireless operators, such as AT&T and Verizon Wireless, are raking in profits, Sprint Nextel has been losing money.
The company lost $211 million during the first quarter compared with a profit of $164 million for the same period a year earlier. Revenue for the quarter, which topped out at $10.1 billion, only grew 1 percent compared to the previous year. The company blamed the disappointing results on investments in network coverage and subsidies for handsets, among other things.
In general, the company has struggled since its Nextel acquisition to retain customers. In the first quarter it lost 220,000 monthly subscribers. The company has consistently had one of the highest churn rates in the industry, topping out at about 2.7 percent for the first quarter. By contrast, Verizon has kept its churn around 1.1 percent.
Given this fact, it might seem strange that the company, which is in desperate need of retaining subscribers, would cut any.
Rene said she had only been calling the customer support line to correct Sprint's billing mistakes.
"I wasn't calling to be annoying," she said. "I was just trying to get them to fix their mistake. I still like the service and feel like I am getting a great deal. I even renewed my contract a couple of months ago and upgraded to the new Treo 755."
She claims Sprint began charging her in January for additional services that had previously been included in a special plan the company offered her in 2005 when she renewed her contract for the third time. The plan consisted of 1,000 anytime voice minutes, free night and weekend calling, free text messaging, unlimited data usage, and free mobile-to-mobile minutes for $40 a month, a great deal to say the least.
When charges started showing up on her bill, Rene called customer support to straighten out the issue and was assured it had been a mistake and the same problem would not occur the following month.
But when her bill came the next month, the charges were still there, she said. For five straight months, Rene called the Sprint customer support line after she received her bill to clear up the erroneous charges, and each time was assured the problem had been fixed.
While she said the customer representatives she dealt with seemed helpful, she often had to sit on hold for 30 minutes or more. She was transferred to several different operators in different departments, she said. And numerous calls were dropped, forcing her to call back.
What Rene didn't realize is that Sprint was keeping a tally of her phone calls, counting each transfer as a separate call to the support line. Finally, without warning, she was told in the June 29 letter to find another carrier.
"Our records indicate that over the past year, we have received frequent calls from you regarding your billing or other general account information," the letter reads. "While we have worked to resolve your issues and questions to the best of our ability, the number of inquiries you have made to us during this time has led us to determine that we are unable to meet your current wireless needs."
"Therefore after careful consideration, the decision has been made to terminate your wireless service agreement effective July 30, 2007."
For the past week, Rene has been trying to get the decision overturned. But on Friday, she was informed that the company is still canceling her service.
Meanwhile, Rene's boyfriend, who is also a Sprint subscriber, says he has gotten 30 unsolicited telemarketing calls over the past several months from Sprint asking him if he wants to add additional lines to his service. Even though he has explicitly asked Sprint not to call him with additional offers, he is still receiving phone calls.
"It's ridiculous that they can call us as many times as they want to sell us something," Rene said. "But if I call to ask them to fix their error, they cancel my service."
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