Sprint Tests New Rate Plans, Launches A Walmart Exclusive - Twice

Sprint Tests New Rate Plans, Launches A Walmart Exclusive

Overland Park, Kan. — Sprint is testing new rate plans and launched a new Walmart-exclusive Virgin Mobile prepaid plan as part of its efforts to reverse subscriber losses.
Author:
Publish date:
sprint_4_3.jpg

Overland Park, Kan. — Sprint is testing new rate plans and launched a new Walmart-exclusive Virgin Mobile prepaid plan as part of its efforts to reverse subscriber losses.

Plans to revive subscriber growth also include continued network modernization, the bulk of which was completed in midyear, to drive up call quality and data speeds. Call quality and coverage suffered during the transition, Sprint admitted.

In the fiscal first quarter ending June, the carrier continued to lose subscribers, though at a slower rate on a sequential basis. Lower losses, however, were driven by a surge in wholesale/affiliate subscribers and by surging tablet activations, which helped cushion the loss of 646,000 direct postpaid handset subscribers.

In a conference call with financial analysts, CEO Dan Hesse promised direct postpaid net subscriber growth would return in the fourth quarter.

As part of that effort, the company is testing new price plans for a “possible future rate-plan refresh,” Hesse said. When the carrier launched its Framily plans in January, “Framily was competitive at the time,” Hesse said, but other carriers have since made price moves. Framily “could be more competitive in certain segments,” he admitted.

As a result of the tests, “we may need to make some adjustments to our prices based on what we learn,” but Hesse said he would be “very surprised” if the company eliminated unlimited-data plans as options. “Unlimited has a strong appeal,” he said. The unlimited message, which the company has made more prominent in advertising, is a major differentiator, he contended.

Chief financial officer Joe Euteneur stressed that rate changes won’t necessarily occur this year because the decision will depend on the test results.

For its Virgin Mobile prepaid brand, however, Sprint initiated a major rate-plan change with the launch of the Virgin Mobile Custom plan, available exclusively through Walmart. Under the plan, consumers can build their own plans with the amount of talk time, text and data that they want, Hesse said. They can also change the plan on the fly direct from their phone to eliminate overages, and account holders can opt to create texting and surfing curfews and block access to any website.

Additional plan details were unavailable.

For subscribers of the Walmart plan and of other new plans that Sprint is considering, Sprint said it is offering improved network performance to keep them on the network.

Already, Hesse said, network improvements have prompted the company to reestablish its Sprint satisfaction guarantee, enabling new subscribers to try the network “worry-free” for 30 days.

Voluntary churn is lower in markets in which network improvements have been in place to 70 percent of a market for seven months or more, he said

By mid-year as part of its network-improvement program, the company had largely completed the replacement of its 3G data and voice network, executives said. In addition, the carrier expanded LTE data to 254 million people, rolled out HD Voice nationwide, deployed 800MHz spectrum for voice to two thirds of its network footprint, and deployed 800MHz LTE to more than a third of its footprint, executives said in a conference call with financial analysts.

The modernization efforts will continue with the expansion of tri-band (800/1900/2,500 MHz) LTE Sprint Spark service, currently available in 27 markets with expansion to 100 million people planned by year’s end.

The carrier also plans later this year to launch two-channel (2x20MHz) carrier aggregation in the 2.5GHz band to further increase capacity and data speeds to more than 100Mbps peak, said Hesse. That would be up from 60Mbps peak in Sprint Spark markets, where LTE is deployed in the 800/1900MHz bands as well as in the 2.5GHz band.

Three-channel (3x20MHz) aggregation will launch in late 2015 to drive peak speeds up to more than 150Mbps. Availability of handsets supporting three-channel aggregation will be accelerated to the first half of 2015, Hesse said.

In other comments, Hesse said sales of the Harman Kardon edition of the HTC One outsells the standard HTC One “significantly” despite its premium price. The special edition includes high-resolution music playback, Harman’s compressed-music restoration technology, and a discounted premium Spotify subscription.

Euteneur said 28 percent of new postpaid subscribers signed up for an installment-payment plan to buy unsubsidized phones, flat with the previous quarter.

While it improves its network, Sprint continued to lose subscribers in its fiscal first quarter ending June, though at a slower rate on a sequential basis.

The smaller subscriber losses, however, were driven by a surge in wholesale and affiliate subscribers while the number of direct subscribers (postpaid and prepaid combined) continued to fall.

The carrier lost 334,000 net subscribers, down from the previous quarter’s 467,000 loss and the year-ago quarter’s loss of 2.03 million.

Among its direct subscribers, the company lost 181,000 postpaid subscribers, less than the previous quarter’s loss of 231,000 but in contrast to the 194,000 net subscribers gained in the year-ago quarter.

The direct-postpaid subscriber losses would have been greater had it not been for 535,000 net tablet additions, which offset net losses of 646,000 handset subscribers and the loss of 70,000 other device subscriptions.

The net number of direct prepaid subscribers fell by 542,000, up from the previous quarter’s loss of 364,000 and the year-ago loss of 486,000.

Wireless operating revenues were flat at $8.2 billion from the year-ago quarter, and wireless operating income hit $558 million, up from $490 million in the previous quarter and in stark contrast to the year-ago quarter’s loss of $864 million.

Featured

Related Articles