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Sprint to Lure Travelers with Cut in Unlimited Data Plans
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U.S. national wireless carrier Sprint Corp. (S - Free Report) has been continuously making efforts to lure customers from rival carriers such as AT&T Inc. (T - Free Report) and Verizon Communications Inc. (VZ - Free Report) by offering attractive promotional plans and lucrative discounts. The year 2016 ended with Sprint’s different winter promotional offers such as ‘Unlimited Freedom’ and ‘Sprint Open World’, as part of the ‘Sprint Open World Winter Promotion’ valid for customers traveling to Mexico and 25 select Caribbean destinations.
Continuing the trend, on Jan 27, 2017, Sprint announced its plans to drop the price of its unlimited data, talk and text plan from $60 to $50, say for a limited period of time—as a promotional offer. Sprint will continue to offer the second line for $40 per month and additional lines for $30 each.
Further, Sprint added that customers signing up for the new Sprint $50 price can avail it till the end of Mar 2018, after which the monthly charge will rise back to $60 per month. Also, Sprint can control the quality and quantity of the content to be downloaded. For instance, if customers use more than 23 GB of data in a single month, the quality of video and music streaming will be degraded along with a fall in their download speed.
Motive Behind the Move
We believe such a strategic move on Sprint’s part has two different perspectives.
On one side, we expect this move to pose a challenge to Verizon's latest promotional offer, wherein the telco announced its limited time offering of 5 GB per month for $55 from Jan 24, 2017. Sprint is aiming to steal some customers from Verizon. On the other side, we believe this is a follow-up of the T-Mobile US Inc.’s (TMUS - Free Report) exceptional step to eradicate all additional fees and taxes on its unlimited data plans.
However, such promotional offers and discounts have always led to high cash burn and heavy losses for Sprint. In spite of such financial troubles, over the past three months, Sprint returned 49.84%, beating the Zacks-categorized Wireless National industry’s gain of 12.08%.
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Sprint to Lure Travelers with Cut in Unlimited Data Plans
U.S. national wireless carrier Sprint Corp. (S - Free Report) has been continuously making efforts to lure customers from rival carriers such as AT&T Inc. (T - Free Report) and Verizon Communications Inc. (VZ - Free Report) by offering attractive promotional plans and lucrative discounts. The year 2016 ended with Sprint’s different winter promotional offers such as ‘Unlimited Freedom’ and ‘Sprint Open World’, as part of the ‘Sprint Open World Winter Promotion’ valid for customers traveling to Mexico and 25 select Caribbean destinations.
Continuing the trend, on Jan 27, 2017, Sprint announced its plans to drop the price of its unlimited data, talk and text plan from $60 to $50, say for a limited period of time—as a promotional offer. Sprint will continue to offer the second line for $40 per month and additional lines for $30 each.
Further, Sprint added that customers signing up for the new Sprint $50 price can avail it till the end of Mar 2018, after which the monthly charge will rise back to $60 per month. Also, Sprint can control the quality and quantity of the content to be downloaded. For instance, if customers use more than 23 GB of data in a single month, the quality of video and music streaming will be degraded along with a fall in their download speed.
Motive Behind the Move
We believe such a strategic move on Sprint’s part has two different perspectives.
On one side, we expect this move to pose a challenge to Verizon's latest promotional offer, wherein the telco announced its limited time offering of 5 GB per month for $55 from Jan 24, 2017. Sprint is aiming to steal some customers from Verizon. On the other side, we believe this is a follow-up of the T-Mobile US Inc.’s (TMUS - Free Report) exceptional step to eradicate all additional fees and taxes on its unlimited data plans.
However, such promotional offers and discounts have always led to high cash burn and heavy losses for Sprint. In spite of such financial troubles, over the past three months, Sprint returned 49.84%, beating the Zacks-categorized Wireless National industry’s gain of 12.08%.
We believe such mixed activities might have led to Sprint’s current Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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