When Verizon Wireless, T-Mobile and AT&T unveiled flat-rate plans last week, it fed speculation that Sprint might try to undercut the other major carriers by offering a fixed-rate voice plan for as low as $60 a month. But rather than competing on price, Sprint's "Simply Everything" plan aims to raise the bar by bundling in data services including SprintTV, Sprint Music and GPS navigation for $100 a month. (Sprint separately introduced a $90 unlimited voice plan.)
In a statement announcing the new all-you-can-eat plan, Sprint President and CEO Dan Hesse emphasized the company's renewed focus on mobile data services. "Our high-speed networks were built with this in mind and it's where we believe the battleground lies--offering fast access to the best content and data services," he said.
Whether the new plan will help Sprint offset its deepening financial woes is another question. The company yesterday announced a $29.5 billion loss for the fourth quarter of 2007, and wrote down the full value of its $35 billion merger with Nextel Communications. Sprint also said it lost 683,000 subscribers during the quarter and expected to lose another 1.2 million in the first quarter of 2008.
In addition to improving customer service, Sprint also wants to retain customers and restore its reputation by offering innovative services. The data-services focused "Simply Everything" offering is one way to help achieve that goal.
Wireless analysts and others welcomed Sprint's comprehensive $100 plan as a positive step. "It demonstrates that Hesse is willing to be bold and that he's not just going to go along making a tweak here or there," said Jan Dawson, vice president at technology research firm Ovum. "Sprint needs to take risks to turn things around, but this can't be the only thing."
The move should help expand the audience for mobile content, according to Jim McNamara, CEO of consultancy Wasabi Mobile and former director of sales channels at Sprint Mobile Media.
"I think this will really open the door to increased adoption of data services," McNamara said. "And the wider the mobile audience, the more attractive that is to advertisers." He added that most mobile users to date have been reluctant to explore mobile content and services beyond voice or text-messaging because of the extra cost.
Overall, only about 14% of U.S. cell phone customers subscribe to data plans, according to mobile market research firm M:Metrics.
Analysts also said Sprint's CDMA-based 3G network should be able to handle any upsurge in traffic as a result of the new unlimited plan. "I think this plays to Sprint's strength because its network can handle the increase in traffic--and I'm not sure all the other [carriers] can match that. Hesse said yesterday Sprint is also moving ahead with plans for a new WiMax network.
Of course, price isn't the only barrier to wider adoption of mobile media. Other hurdles including compatibility among networks and devices, insufficient mobile bandwidth, a lack of high-quality content and digital licensing issues also remain.
But "anything that can help increase the mobile audience will help," McNamara said.