Sprint and its new owner, SoftBank, hit the ground running on Thursday by announcing service plans that can include guaranteed talk, text, and data for life.
New or existing Sprint customers who sign up for the My Way or My All-in plans with unlimited services will be able to hold on to those services for the life of the line of service, the company said Thursday. That could potentially be indefinitely, since the service comes with no fixed term. The new plans, which go on sale Friday, include options for single and multiple phones and will let subscribers include basic phones with or without data.
The My All-in plan includes unlimited talk, text, and data on Sprint’s network, plus 5GB per month of hotspot data that can be used by laptops, tablets and other Wi-Fi devices, for $110. The My Way plan starts with $50 per month for unlimited talk and text on one phone, with incremental rates going down as more phones are added to the plan. My Way data options include $30 for unlimited, $20 for 1GB and $10 for unlimited data on a basic phone. Sprint laid out more details and a comparison with other carriers’ plans on its site.
Sprint’s guarantee is limited to its own network, so subscribers can’t count on having unlimited service when roaming on other systems in the U.S. or overseas. To keep their unlimited service, they need to remain on the plan, meet its terms and conditions, and pay their bills on time.
The move bore out industry analysts’ predictions that the SoftBank buyout would lead Sprint to aggressive and creative efforts at competing with its rivals. SoftBank, which is an underdog in its home market of Japan just as Sprint is in the U.S., has developed a reputation for competing fiercely on price.
SoftBank’s $21.6 billion acquisition of Sprint, which was finalized on Wednesday, both cleared up uncertainty that had hung over Sprint for many months and brought the fourth-largest U.S. carrier new investment and spectrum assets that should help it to back up its new unlimited promise. In conjunction with the SoftBank deal, Sprint bought out former network partner Clearwire, which gives it spectrum that will be used to ensure adequate capacity in high-demand metropolitan areas.
Unlimited data has been a big part of Sprint’s sales pitch for years, as rival carriers gradually moved toward plans that are capped or that revert to slower networks after the subscriber passes a per-month limit. T-Mobile still offers an unlimited data plan but notes in its terms of service that it may reduce a customer’s data speed if their usage exceeds 5GB in a month.
Sprint has been able to offer unlimited data partly as a result of its relatively small subscriber base, according to industry analysts. The company’s networks haven’t been as heavily used as those of Verizon Wireless and AT&T, each of which has about double Sprint’s approximately 55 million subscribers, analysts say.
The acquisition of Clearwire cut Sprint even more slack for continuing to offer unlimited data plans, according to Roger Entner of Recon Analytics. With the former Clearwire spectrum, Sprint now has more spectrum than any other U.S. mobile operator, he said.
“It’ll take a while before their network gets fully loaded,” said Chetan Sharma, founder and president of Chetan Sharma Consulting.
A move of necessity
One problem the guarantee may help to solve is churn, or the loss of subscribers over time, which happens at a higher rate at Sprint than at the bigger carriers, Sharma said. Replacing a customer who’s switched to another carrier can run to as much as $400 in marketing costs, he said. “It’s easier to just keep your existing subscribers,” Sharma said.
The risk for Sprint is that data use by its unlimited customers is likely to go up significantly over time.
“Guaranteeing unlimited is a bold move in the sense that two, three, or five years out, if they’re guaranteeing that, they’re really putting a stake in the ground,” Sharma said.