Sprint Offers Half Off - With Asterisks - To Verizon And AT&T Customers

Sprint is serving up another scintillating headline to lure new customers — cut your bill in half — but the devil is in the qualifiers.

Here’s what Sprint CEO Marcelo Claure has to say in boldface in a release announcing the promotion, which begins Friday and is for a “limited” time:

“It’s as simple as this: Bring Sprint your Verizon or AT&T bill along with your phone and we’ll cut your rate plan in half. That’s a 50 percent savings on your rate plan every month. And this great deal is not just a promotion. This will be the customer’s ongoing price.”

The company will also pay up to $350 per line for any early termination fee or installment bill balance on a Visa Prepaid Card. But wait, there’s more: activation fees of up to $36 per line will also be waived, which could add up to a lot if you’re on a family plan. 

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Oh, but did we mention that if you are on a family plan, every member has to turn in their old phone and join the Sprint family?

“As is normally the case with these specials, there's some important fine print to be aware of,” writes Chris Welch on The Verge. “First, say goodbye to on-contract pricing. Your new phone must be purchased through Sprint's leasing program, Easy Pay installment billing, or bought outright.”

So do the math, as BTIG telecom analyst Walter Piecyk did.

He “compared a current Verizon contract plan that costs $240 a month for four phones with 10 gigabytes of shareable data,” reports Ryan Knutson in the Wall Street Journal. “If that family switches to Sprint, their bill would drop to $120 a month — but they would be required to purchase new phones. If everyone in the family got a 16 gigabyte iPhone 6, which costs about $27 a month, they would wind up saving only $12 a month.”

Piecyk tells Knutson that “it’s not clear to me if the headline is going to be enough to get people to move.” 

“While the latest pitch could well appeal to AT&T and Verizon customers willing to move to Sprint’s network, it could turn out to be a logistical nightmare for Sprint’s business,” points out Re/code’s Ina Fried. “In addition to the considerable up-front work needed to determine a customer’s rate, Sprint will be left with customers on a seemingly infinite number of different rate plans.”

Notably absent from the offer are those customers who use the No. 3 carrier, T-Mobile, Sprint’s erstwhile merger partner and recent Best Enemy. Its “Uncarrier” strategy “also is predicated on threatening the larger carriers' business model,” as Brian Fung writes in the Washington Post

“Sprint's ‘cut your wireless bill in half event’ smacks of a desperation move,” J. Gold Associates analyst Jack Gold tellsComputerworld’s Matt Hamblen. “Sprint is assuring a very low margin for those new customers they sign at half off ... But this is also a sign that the new management at Sprint will not sit idly by while other carriers steal away their subscribers. They have their boxing gloves on and will use them whenever they have to.”

They have no lack of sparring partners.

“Mobile device plans in the U.S. are quickly descending into ‘Crazy Eddie’ territory, with carriers offering aggressively discounted deals to lure subscribers,” writesPC World’s Ian Paul, pointing out that in August Sprint offered 20GB of shared data for $100 per month after T-Mobile launched a similar deal in July. “More recently, T-Mobile announced free voice calls and text via wi-fi, and AT&T doubled the data allotments on its family plans in September,” Paul adds.

Bottom line is that “Sprint has a long way to go,” as Katie LoBosco writes on CNN Money. “Though its speeds are improving, it still has by far the slowest 4G network of its rivals. It was rated the worst cell phone service in the nation by Consumer Reports last year. On top of all that, it continues to hemorrhage money and lose customers.”

It’s stock closed down 3.1%  yesterday after it “kicked the beehive,” as BetaWired puts it. That continue a downward vortex that has seen it lose 56% of its market value this year due to disappointment over its “botched acquisition of T-Mobile and difficult-to-implement network overhauls leading to a slow but steady drip of customers leaving for other providers.”

And when they look at what’s to the right of the asterisk, those customers may conclude that “half off” ain’t what it used to be.

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