Lower Prices, More Features Indicate Right Call on Sprint/T-Mobile

By Doug Mohney September 02, 2014

It's been about a month since Sprint kicked out Dan Hesse and let slip that it was not pursuing T-Mobile.  Instead, we've seen a battle of pricing plans between the two firms.  If you are a price conscious shopper, it's all good.

Within days after bringing in a new CEO, Sprint announced a new family plan and $60 per month unlimited plan for text, talk, and data, proudly boasting it was "$20 cheaper than" T-Mobile's $80 per month unlimited plan.  Of course, to qualify, new and existing customers had to either purchase their phone through Sprint Easy Pay, pay full retail price or bring their own compatible device.

Sprint previously owned the "unlimited plan" concept in my mind until T-Mobile showed up and started pounding the table that it had a cheaper plan if you brought your own phone.  Now, the company can boast that savings on a two year contract pay for a good chunk of the shiny-new phone customers are more likely to buy if they sign up.

It is also nice to see the whole "Framily" word -- talk about ugly -- got flushed when the company announced its new family plan.  For $100 a month -- about what I used to pay for Sprint "Unlimited" a few years ago -- a family can have up to 10 lines with 20 GB of shared data across them.

Sprint has also embraced International Wi-Fi calling back to the U.S., Puerto Rico, and the U.S. Virgin Islands for no cost. Make a call outside the U.S. on Sprint's Wi-Fi Android client and there's no charges and no minutes counted against a monthly plan.  T-Mobile has had free international Wi-Fi calling for ages along with various plans from the OTT crowd, so Sprint's playing catch-up.

If there's a problem here, it's Sprint is playing catch-up on matching pricing and features while T-Mobile already has at least three to five moves in the pipeline.   Sprint will have to be reactive rather than proactive as it continues to update its network and shed personnel. Talk of gigabit wireless speeds over LTE and other future ideas aren't what customers want at this point.

Exactly what T-Mobile has in mind is unknown.  The company plans to announce "Uncarrier 7.0" on September 10 in San Francisco, promising that "This time it's personal" on the press invite. Expect some more consumer-aimed incentives. 

But T-Mobile is also more than just grabbing consumers. The company has taken aim at enterprises with international business plans, including flat rate voice and offerings.  CEO John Legere and other executives have recognized the value of LTE as a data network first and foremost, with the ability to layer other value-added services on top.  Expanded mobile wallet services could be one area where the company could make advances and I wouldn't be surprised if it embraces voice biometrics for authenticating its customers and as a value-added service.

How long both companies can sustain a price war is an open question.  Sprint is backed by Softbank's money while Deutsche Telekom believes it can get $35 or more a share for T-Mobile at this point in time, yet both can't continue to lose money over the long term.  Ultimately, someone has to blink in the "lowest best price ever" game.




Edited by Stefania Viscusi

Contributing Editor

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