Can Sprint curb subscriber losses with lower pricing?

by Trefis Team
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Sprint is enticing heavy mobile phone users that pay for the most expensive unlimited plans to switch from competitors AT&T and Verizon to Sprint. The company is offering a $100 per month unlimited access mobile phone plan that would cost $125 per month from AT&T and $135 per month from Verizon for equivalent features.

Sprint’s plan includes unlimited calling, texting, data and push-to-talk features.  For heavy mobile phone users, switching from AT&T or Verizon to Sprint can amount to savings of $300 or more per year.

Sprint is using attractive pricing to overcome a few handicaps:

1. Limited smartphone selection

Sprint has a limited selection of smartphones compared to AT&T. Most importantly, AT&T still remains the exclusive provider of the iPhone while Sprint no longer has exclusivity for the Palm Pre.

2. Perception that Sprint network is unreliable

Sprint’s network is yet untested for large data usage from smartphones like the iPhone. While AT&T has faced network issues, Sprint’s brand has deteriorated in recent years with continuous subscriber losses attributable to poor service.

Sprint may have some success with this strategy; however, heavy mobile phone users are likely to remain with the company that provides the best network service.

You can see here how Sprint would be impacted if its pricing strategy were to lead to increases in its subscriber base.  You can also see how AT&T and Verizon could be impacted if they decreased their pricing to minimize subscriber losses to Sprint.

Show Sprint Subscriber Forecast Chart

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