Commentary

Sprint Enticing Competitors' Patrons With $15 Unlimited Data Plan

Even as its proposed merger with T-Mobile is under review by federal regulators, Sprint is offering a $15-a-month-per-line unlimited data plan to lure customers from its competitors, including the “Uncarrier.” The Overland Park, Kan.-based carrier rolled out its Unlimited Kickstart special promotion on Thursday with the warning that “just like summer, this offer won’t last long.”

That translates to “weeks, not months,” Allan Samson, Sprint’s SVP of acquisition, tells CNET’s Roger Cheng, who writes that the promotion “is the cheapest offer for an unlimited data plan, undercutting even the low-cost prepaid carriers and underscoring Sprint’s aggressive push to lure you in. While competition among the carriers remains fierce, the lack of new significant promotions over the last few months suggested a return to normalcy. But Sprint, under new CEO Michel Combes, looks to be stirring things up again.”

Combes was named CEO of Sprint in early May when Marcelo Claure was bumped up to executive chairman of Sprint, as well as COO of its parent, SoftBank Group Corp., and CEO of SoftBank Group International.

Combes joined Sprint in January to replace CFO Tarek Robbiati. Before joining Sprint, Combes was the former head of French cable company Altice. Prior to that position, Combes was the CEO of Alcatel-Lucent during the company’s sale to Nokia,” Mike Dano wrote at the time for Fierce Wireless

But as anyone who has ever signed a contract on a too-good-to-be-true deal without reading the fine print knows, there’s always a caveat. Or two. Or three.

“Sprint’s $15 plan comes with a catch,” reports Fortune’s Monica Rodriquez. “While it covers unlimited calls, text, and 4G LTE data, the deal caps video streaming at a low 480 pixels. So, Netflix lovers may not be able to binge-watch their favorite shows from their smartphones anymore — at least with much screen clarity. Additionally, the $15 rate is probably going to be a little higher than marketed because the promotional price is calculated without adding any of the usual taxes and fees.

“Perhaps it’s most notable drawback is that the plan requires a new line port, meaning customers must bring their number from another carrier.”

Sprint’s Samson tells CNET’s Cheng that the deal “wouldn't work financially if offered as a regular plan, and said the low price was designed to nudge people who have hesitated to switch to Sprint. This is less an engine for customer growth and more a way to build word-of-mouth buzz for Sprint.”

“There is an audience out there waiting for a reason to give Sprint a try,” Samson says. “We believe this is a compelling reason.”

“We surveyed the competition. Nothing comes close,” reads the hed over Jefferson Graham’s piece for USA Today. Before surveying some other enticing deals from smaller carriers such as FreedomPop, TextNow and MintMobile, Graham points out another caveat. “There are limitations, namely that it’s on the Sprint network, which is historically weaker than competitors — one reason that Sprint and No. 3 carrier T-Mobile have proposed merging.”

But, in the end, the price is right. Virgin Mobile, for example, has a $1 monthly plan for unlimited talk, text and data. But after six months, it jumps to $50 monthly. “A year's service would cost you just over $300, a good deal more than 12 months with Sprint at $180,” Graham writes.

Meanwhile, the Department of Justice is examining how the proposed merger between T-Mobile Sprint could affect prices for those smaller operators, two people familiar with the matter tell Reuters’ Shiela Dang. The DOJ “has been speaking with small wireless operators that buy access to the major wireless networks at wholesale rates, and is seeking their opinions about the merger,” she writes.

“A merger between T-Mobile and Sprint without any concessions would be bad for consumers, businesses and the country,” Peter Adderton, founder and former CEO of Boost Mobile USA, which was acquired by Sprint, tells Dang. Adderton, who is no longer affiliated with Boost Mobile’s business in the U.S., “said it was ‘encouraging’ to see the Justice Department reach out to learn about how the merger could affect businesses and consumers.”

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