uploads///Telecom postpaid phone subscribers gain

Must-know: Sprint is resorting to price cuts

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Dec. 4 2020, Updated 10:42 a.m. ET

Sprint offers attractive plans for customers to switch from other carriers

Recently, Sprint (S) announced that it would offer new subscribers a better plan—if they switch from other carriers. The new subscribers would only pay half of what they’re currently paying with Verizon (VZ) or AT&T (T). Sprint’s strategy is specifically targeted at Verizon and AT&T’s family plans—for example, Verizon’s MORE Everything plan.

If a family of four is paying $240 to Verizon for access to four lines and 10 gigabits (or GB) of data, they will pay $120 if they switch to Sprint. However, there’s a condition that the customers have to buy devices from Sprint. They can pay the full amount or subscribe to its subsidy plan or its Easy Pay program.

Compared to its competitors, Sprint is already underpricing its plan for Apple’s (AAPL) iPhone 6. We discussed this in Why Apple’s iPhone 6 could instill life into Sprint. This shows that Sprint continues to resort to price cuts.

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Sprint continue to lose net subscribers

Sprint’s price cuts are clearly aimed at gaining net subscribers at the expense of its competitors—Verizon, AT&T, and T-Mobile (TMUS). Sprint is the only major US telecom company that kept losing subscribers.

As the above chart shows, Sprint lost 500,000 postpaid phone net connections in 3Q14. In contrast, Verizon, AT&T, and T-Mobile all gained net subscribers in the last quarter. T-Mobile gained a surprising 1.2 million net subscribers.

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