Sprint’s unlimited plans
In the first part of this series, we talked about the price hike in Sprint’s (S) unlimited plans for voice, text, and data beginning October 16. Now we’ll look at the comparative positioning of Sprint’s unlimited plans in comparison to the offerings of its peers. In the US wireless space, the top four players are Verizon Communications (VZ), AT&T (T), T-Mobile (TMUS), and Sprint. According to Sprint’s press release, “at $60/month, Sprint offers the lowest rate among national carriers for an unlimited high-speed data, talk and text plan.”
As the above figure shows, the largest two US wireless carriers—AT&T and Verizon—do not have such unlimited plans. However, AT&T offers its Mobile Share Value plans while Verizon offers its “The Verizon Plan,” which is also shareable.
Like Sprint, T-Mobile offers these unlimited plans. According to Sprint’s press release, “T-Mobile’s Simple Choice Unlimited talk, text and high-speed data plan is $80/month.” This price is still more than the $70 monthly price of Sprint’s Unlimited Plans from October 16.
Sprint’s pricing strategy
The higher pricing of the unlimited plans may negatively affect—at least to some extent—Sprint’s competitive positioning in the US wireless space. Sprint’s strategy in the US wireless space has a higher relative focus on the pricing side. According to Marcelo Claure, the company’s CEO, Sprint is the price leader in the US wireless space. He spoke about this in September at the Goldman Sachs Communacopia Conference.
Instead of taking a direct exposure to Sprint’s stock, you may consider taking a diversified exposure to the telecommunications company by investing in the iShares Russell 3000 ETF (IWV), which had ~0.02% of its holdings in Sprint at the end of August 2015.
In the next part of this series, we’ll look at Sprint’s plan for cost reductions over the next six months.