Wireless service provider, Sprint Corporation (S - Analyst Report), announced a new service plan – Framily – that allows customers to form groups and lower their costs by as much as $25.00 per month. Since the innovative pricing plans are pocket friendly and come with an enhanced wireless experience, these are accretive to the company’s customer base. The Framily plan is slated for a Jan 10 launch.
Sprint’s new service includes unlimited talk and text and 1 GB of data. Initially, a new customer will have to pay $55.00 per month but as the number of people in the group increases, the cost will be reduced by $5.00 per person. For a group of seven people, the cost will be lowered by $25.00 per person. Framily can also be customized depending upon the requirements of every individual in a group. Moreover, for $20 a month, one can also receive unlimited data under this plan.
Sprint is focusing on revenue growth in the core Sprint platform business. In the third quarter, Sprint registered a surge in its service revenues thanks to the introduction of new pricing plans such as Unlimited, My Way and My All-In plans that include unlimited talk, text and data. In addition, the company has also gained from its plan, Sprint One Up, which offers unlimited talk, text and data along with smartphone upgrade every 12 months.
Further, the company is increasing the penetration of prepaid plans. Sprint’s multi-brand services including Boost Mobile, Assurance Wireless and Virgin Mobile as well as innovative offers like $50 Monthly Unlimited plan with Shrinkage, Beyond Talk plans and Broadband2Go are contributing significantly to the company’s subscriber growth.
Additionally, the company started offering the popular Apple Inc. (AAPL - Analyst Report) iPhone through its no-contract prepaid Virgin Mobile brand and WiMAX service via both prepaid Virgin and Boost Mobile. The company also offers Unlimited Guarantee plan for unlimited data at $30 a month on smartphones and $10 per month on other phones including voice and text service at $50 on first connection.
We believe these initiatives will broaden the company’s customer base as well as increase smartphone penetration and average revenue per user (ARPU) with improving churn rate.
Sprint holds a Zacks Rank #3 (Hold).
Better-ranked stocks in this sector include Hawaiian Telcom Holdco, Inc. (HCOM - Snapshot Report) and Level 3 Communications, Inc. (LVLT - Analyst Report). Both carry a Zacks Rank #1 (Strong Buy).