Sprint Corp. (NYSE:S) fired its own warning shot to the mobile industry. Not content to watch T-Mobile US win new customers through steep discounting, new Sprint CEO Marcelo Claure warned rates for Sprint's new mobile plans will be “very disruptive" going forward.
“We’re going to change our plans to make sure they are simple and attractive, and make sure every customer in America thinks twice about signing up to a competitor,” Claure told the telecommunications publication Light Reading last week.
Claure’s first executive order was announcing a new family plan for Sprint, which allows users to have as many as 10 lines and share 20GB of data for $100 per month. Sprint says it plans to announce updates to its individual rate plans later this week. That's more lines, cheaper than T-Mobile US Inc. (NYSE:TMUS), Verizon (NYSE:VZ) or AT&T (NYSE:T).
However, Sprint realizes it has to be wary of introducing extravagant discounts for the sake of garnering new customers. Sprint’s new family plan is a limited time offer, for which users must sign up by the end of September, and the plan will be valid through the end of 2015. Re/code also notes in its new industry shake up, Sprint is ignoring existing customers.
Sprint’s move was quickly countered by its closest rival, T-Mobile, which has also announced a new family plan option that allows users to have as many as 6 lines with 2.5GB of data each (totaling 15GB) for $120. Reports indicate T-Mobile may be planning to establish rates for a 10-line family plan in the future. Verizon Communications (NYSE:VZ) is likely also preempting Sprint’s new individual rates with a new single-line plan that includes unlimited talk, text and 2GB data for $60.
“It’s a competitive response. It shows how competitive the market is and if [a network] introduces a new offer the rivals are taking it seriously,” Roger Entner of Recon Analytics told International Business Times in July.
Sprint has taken notes from T-Mobile’s 18-month lead of mobile network change. Thus far, many changes other carriers have made have been in response to various offers T-Mobile has announced. Still, the Now Network is still being wary with its own counter moves. Sprint Friday will begin an early termination fee reimbursement program, which pays customers up to $350 for the costs of ending a contract with another carrier, an offer that was first introduced by T-Mobile.
Claure reportedly spent his first day as Sprint’s CEO meeting with Apple Inc. (NASDAQ:AAPL) CEO Tim Cook, and told Light Reading Apple "will become a crucial part of Sprint." Notably, T-Mobile announced its Test Drive program in June, which is an exclusive partnership with Apple to allow customers to try out the Magenta network free for seven days on an iPhone.