Sprint Throws Subscribers Bone After $29.5 Billion Loss

Attempting to stop consumers from defecting to rival carriers, Sprint Nextel on Thursday introduced an unlimited voice and data services plan for $99.99 per month after reporting a fourth-quarter loss, ending Dec. 31, of $29.5 billion, or $10.36 per share. The company wrote down most of the remaining value of its Nextel Communications purchase in 2005, and stated it would stop paying dividends for the foreseeable future.

Dubbed Simply Everything, the plan gives subscribers voice, data, text, e-mail, Web-surfing, Sprint TV, Sprint Music, GPS Navigation, Direct Connect and Group Connect for one monthly price. During a call with analysts, Sprint CEO Dan Hesse forecast the third-largest U.S. carrier would lose 1.2 million annual-contract subscribers in the first quarter of this year and more in the second.

During the reported quarter, revenue fell about 6%, to $9.8 billion, compared with the year earlier. About 108,000 subscribers took their business elsewhere, but an increase in its Boost prepaid and wholesale channels brand partially offset a loss of 683,000 subscribers paying monthly bills.

Print ads and in-store promotional displays that focus on marketing the Simply Everything plan begin to roll out Friday, along with the service, according to Emmy Anderson, Sprint spokesperson. "We're marketing the new service through our existing ad campaign plans, so we don't spend additional funds," she says.

Sprint previously committed spending $200 million on advertising to market Nextel Direct Connect. The new Simply Everything Plan includes unlimited Direct Connect, so the carrier will tap into existing plans to promote the Simply Everything Plan at the same time.

Sprint has recently stepped up its focus on marketing and advertising messages on unique services. The carrier has been paying more attention to sending compelling messages, switching last April to Goodby Silverstein & Partners as AOR.

"When we brought on Goodby Silverstein & Partners, they began to feature bright giant swirls that create a more noticeable visual to catch your attention," Anderson says. "They carried the message across everything we do at Sprint."

The new pricing plan is available to existing and new customers on both Sprint's CDMA network and Nextel iDEN. Subscribers don't need to renew or extend their contracts. There's also a $5-per-month discount for families subscribing to high-end plans.

Rival carriers AT&T, Verizon and T-Mobile also offer unlimited service plans for one monthly price. Recently, Verizon was the first to announce a $99.99 unlimited voice plan--followed by AT&T, and then T-Mobile, which offered the most comprehensive plan for text, voice and picture messaging until now.

Tags: telecom
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