Laura Banks
2
All posts from Laura Banks
Laura Banks in Markets and everything in & between!,

Sprint Beats Rivals With Lowest IPhone Plan as Sales Debut Looms

Sprint Corp. (S), striving to win back users, is offering the best deal in the industry ahead of the biggest phone debuts of the year -- the iPhone 6 and 6 Plus, arriving later this week.

In a comparison of total costs for an iPhone 6 with a base level of 16 gigabytes of storage, Sprint’s “iPhone for Life” plan is by far the cheapest of the four top U.S. wireless carriers, according to research by Jonathan Atkin, an analyst with RBC Capital Markets. Counting phone payments and service fees, Sprint’s $1,680 offer over two years undercuts a comparable plan from AT&T Inc. by $1,250. It’s also $1,130 lower than Verizon Communications Inc. and $410 below T-Mobile US Inc., Atkin said.

Sprint’s price cuts are some of the first moves by Marcelo Claure, the new chief executive officer hired last month to pull the company out of a tailspin. After predecessor Dan Hesse held back on price cuts, Claure is attempting to help Sprint gain customers for the first time in seven years through aggressive, low-priced service plans.

With the iPhone debut looming, Claure said he spent his first day on the job meeting with Apple Inc. (AAPL) CEO Tim Cook about iPhone sales plans.

“Sprint’s offer is the most differentiated, at least thus far,” Atkin said. With every major wireless service offering the iPhone, Sprint wants to make the most of the occasion, he said.

While Sprint’s iPhone plan for individuals beats any package offered by its competitors, the service does have a twist. Sprint subscribers are technically renting the phone and can turn it in after two years to get a new one. Atkin’s comparison doesn’t include the effect of discounts for phone trade-ins, and his research didn’t compare the carriers’ family plans, which have different prices.

Best Weapon

Lowering prices may be Sprint’s best sales weapon, because it can’t compete yet on network quality. Sprint ranked last of the top four wireless carriers in a study of network performance released last month by RootMetrics.

Sprint has been behind Verizon and AT&T in network upgrades, refitting the network with enough capacity to meet rising consumer demand for streaming video and music. Claure said last week that it could be another year before the coverage density is high enough to start advertising it as the best.

“Price and a deep data allotment are their best tools,” Atkin said.

http://www.bloomberg.com/news/2014-09-15/sprint-beats-rivals-with-lowest-iphone-plan-as-sales-debut-looms.html