Sprint (NYSE:S) has agreed to stop claiming it has a "brand new" network after an industry watchdog group claimed that it found some of the company's advertising misleading.
The National Advertising Division, which is overseen by the Council of Better Business Bureaus, issued a series of recommendations for the carrier, finding fault with a number of its claims. These included, but are not limited to:
- "America's Newest Network, built from the ground up."
- "Now is the time to try America's Newest Network. Why? Because at Sprint, when we say America's Newest network, we mean a brand new network. We started from the ground up and built an all-new network that now delivers faster speeds and better call quality."
- "Sprint is the most improved U.S. company in customer satisfaction, across all 43 industries, over the last six years."
- "Sprint has an all-new network, providing customers across the country with significantly better call quality and faster data speeds in more places."
A full list can be found here, but the others are all variants on the same themes -- that Sprint has a new network and that it is the most improved U.S. company in customer satisfaction, across all 43 industries, over the last six years. NAD disagreed and urged the carrier to stop making these claims.
The investigation came about as a result of complaints filed by T-Mobile (NASDAQ:TMUS), which is close to overtaking Sprint to become the third largest carrier in the U.S.
While Sprint did not admit fault, a company spokesman did tell GeekWire via a statement it had "already phased out most of the language at issue, and will remove or revise some of its claims going forward."
"We respectfully disagree with the NAD's conclusions that our advertising was in any way unsupported or misleading," said a Sprint spokeswoman, in a statement. "We continue to believe that our advertising truthfully conveyed the many customer improvements brought by our rip-and-replace and ongoing network enhancements, as well as our improvement in customer satisfaction scores over the last six years. We respect the self-regulatory process, and we will follow the NAD's recommendations in our advertising going forward."
Essentially the company is saying: we're not wrong, but we won't do it again.
Sprint was not exactly lying
Sprint wasn't precisely lying, it was more shading the news and leaving out relevant information. The NAD dissected each claim and laid out its opposition.
"NAD was not persuaded that a network could be termed 'newest' simply because its modernization efforts involved dismantling an old network as opposed to upgrading an existing network," the group said, according to CBS.
NAD acknowledged that Sprint has made fundamental changes to its network as part of the company's Network Vision Initiative. Where the agency took issue is that there is no industry standard by which to evaluate which network is the "newest."
The watchdog group also took issue with Sprint's claims that it offers "faster data speeds," "better call quality," and "fewer dropped calls." It asked the company to make it clear that those claims are in relation to its previous network, not rival carriers.
Lastly, NAD recommended that the advertiser discontinue the claim that it is "the most improved U.S. company in customer satisfaction, across all 43 industries, over the last six years."
That claim is actually technically true, according to NAD. Sprint obtained an eight-point increase between its current American Consumer Satisfaction Index score and its ACSI score in 2008 – the biggest improvement that any company evaluated by ASCI has had over its 2008 score. Where NAD took issue is that the ads implied a steady year-to-year improvement, which is not what happened.
"NAD found that by selectively referencing data from 2008 and ignoring more recent data that showed an annual decline in costumer satisfaction since 2011, the claim did not accurately convey Sprint's track record of customer satisfaction ratings in a way that was consumer meaningful," wrote the Advertising Industry Self-Regulatory council, a sister organization of NAD.
Good for Sprint?
While Sprint gave in and agreed to stop making these claims, the company never had to admit they were false or publish any sort of retraction.
Wireless company claims are about as meaningless as when a network advertises a show as "Tuesday's newest comedy hit." That vague statement does not tell you the show is a hit, only that it's a hit in relation to other new comedies which air on Tuesday night.
Claiming the best anything in the wireless business is generally met with customer indifference, so Sprint is probably better off focusing its ads on the one area where it actually does beat at least Verizon and AT&T -- price.
Sprint lost here and T-Mobile gets to laugh a little bit, but having to make these changes won't impact the carrier's business in any meaningful way.
Daniel Kline owns shares of Apple. He plans on making dubious claims about being the "world's tallest man." The Motley Fool recommends Apple and Verizon Communications. 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.