Sprint’s Carrot and Stick - US Carrier Price War
One week ago Verizon Wireless threw down the gauntlet by announcing a $99 unlimited voice plan for post paid subscribers to kick off the battle. AT&T followed within hours to up the ante by extending the unlimited plan to month-to-month customers and combining data unlimited plans. The next announcement came from T-mobile USA and included both unlimited talk and unlimited messaging (picture and text) for $99. Yesterday Sprint launched their response with a $99 rate plan for…wait for it…everything!
Sprint subscribers pay $99/month for voice, text, pictures, Sprint TV, GPS, Music and even data card connectivity. Sprint calls the plan “Simplicity.” While the company continue to struggle with it’s Nextel merger, writing off a total sum equivalent to Nextel’s value at the time of the merger, Sprint accelerates the price war with it’s competitors.
The parallel with the drive to zero for long distance service initiated by Sprint in the 1990s is striking. Unlimited talk time might seem trivial in countries like the UK where voice minutes per subscriber barely exceed 200 minutes/month, or in Russia where the minutes used don’t break triple digits (70 minutes). However, in the US were the average talk time is almost 900 minutes/month and landline replacement is at a tipping point, unlimited talk is a welcomed development.
AT&T allows new customers to select month-to-month, 12 or 24 month contracts. Conversely, Sprint’s offer requires a 2 year contract. This is the stick. With Sprint’s future mostly uncertain and the tease of Xohm looming (maybe) in the seconf half of 2008, and most importantly the likely competitive response from Verizon, is now the time to be committed to Sprint PCS service for the next 2 years?
Attention should also be paid to the developments in voice and vehicle interfaces for full appreciation of the potential impact from unlimited voice minutes. The US market drives. Who wants to tap-a-tap-tap at 80 mph?
Rating: More, please!
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2 Responses to “Sprint’s Carrot and Stick - US Carrier Price War”
[...] unknown wrote an interesting post today onHere’s a quick excerpt [...]
Comment made on February 29th, 2008 at 4:58 am[...] between Verizon, AT&T, T-Mobile, and Sprint, at least in the United States (see, for example, Debi Jones’ post at the GoMo blog). Skydeck’s Jason Devitt argues in Mother Of All Price Wars? that journalists and Wall [...]
Comment made on March 2nd, 2008 at 10:38 pmLeave a Comment