Sprint Corporation Is Trying to Beat T-Mobile at Its Own Game

Sprint's latest family plan is straight out of T-Mobile's playbook.

Aug 21, 2014 at 11:00AM

The wireless carrier industry is getting even more cutthroat. Spurred by rock-bottom pricing from T-Mobile (NASDAQ:TMUS), the larger carriers like AT&T and Verizon have responded and changed plans over the past year just to keep up. But it's Sprint (NYSE:S) that's taken the biggest hit as subscribers jump to T-Mobile's alluring plans.

Instead of ceding to its rivals, Sprint jumped into the ring this week with some new pricing plans of its own.

A fresh start
Sprint's newest plan offers unlimited talk, text, and 20GB of shared data, for up to 10 lines, for just $100 per month. The price pops up to $160 per month at the end of 2015, matching the cost of both Verizon's and AT&T's plans, which offer only 10GB per month. Sprint's also throwing in an additional 2GB per line, for up to 10 lines. 

For a limited time, Sprint's giving new customers a $350 pre-paid card to put toward early termination fees when they switch to Sprint's plan. The move comes as Sprint's new CEO, Marcelo Claure, said last week that cutting prices would be a top priority.

Sprint is trying to reverse its decline in subscriber growth amid fierce wireless competition. In the most recent quarter ending in June, the company posted $8.79 billion in revenue, with $23 million in net income -- its first profitable quarter in more than six years. 

In its fiscal Q1 Sprint also slowed some of its previous customer hemorrhaging, losing 334,000 net customers, compared to more than two million it lost a year ago.

But losing more than a quarter of a million customers in a quarter is not great news. Especially when Sprint's smaller rival, T-Mobile, posted 1.5 million net customer gains over the same period. T-Mobile is inching very close to the No. 3 U.S. wireless carrier spot, with 50 million customers now.

Let's take a quick look at the subscriber quarterly net subscriber gains for the four major carriers since 2012:

Sprint Tmobile

Source: Jackdaw Research. 

T-Mobile has clearly added to its subscribers over the past few years, while Sprint's quarterly net adds are moving in the wrong direction.

But aside from T-Mobile's gains, the company's network is also starting to beat Sprint's.

Losing more ground
This week, RootMetrics put out a report showing the overall performance of T-Mobile's network leapfrogged Sprint's, compared to the same study last year. Verizon took the top spot away from AT&T, while T-Mobile took the No. 3 spot, and Sprint fell to last place. T-Mobile also beat Sprint in the speed tests, data performance, and call performance.

Rootmetrics Sprint

Source: RootMetrics.

The report said, "T-Mobile's improvement is also clearly seen when looking closely at how it compared to Sprint in our last study versus this round of testing. In the second half of 2013, T-Mobile finished last in five out of our six categories. This time, T-Mobile jumped over Sprint and finished in third place in four categories." 

RoboMetrics noted Sprint could easily win back the speed test when more of is faster Spark tri-band technology goes online.

Foolish thoughts
Sprint's latest data plan announcement should be a step in the right direction for the company, in part because it mirrors how T-Mobile has gained so much ground over the past few years.

But now that it's completely dropped all plans for a possible takeover of T-Mobile, it'll have to match the "uncarrier's" offers as closely as possible. T-Mobile's momentum appears unstoppable at the moment, and its slew of new announcements -- including a new $100 per month family plan in July -- means Sprint needs to continue bringing innovative plans to market. Sprint says it'll have yet another big announcement later this week, so it might just be on the right track.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early, in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers