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Why Is Sprint Offering a Discount to Competitors’ Customers?

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Nov. 20 2020, Updated 4:43 p.m. ET

Sprint on its 50% promotion

In the last part of this series, we learned about the performance of Sprint’s (S) 50% promotion for customers of T-Mobile (TMUS), Verizon (VZ), and AT&T (T). We also compared the growth profile of Sprint’s postpaid customers with other US wireless carriers’ growth profiles. Here we’ll look at one of the reasons behind Sprint’s 50% discount. Tarek Robbiati, Sprint’s chief financial officer, discussed this at the Citi Internet, Media & Telecommunications Conference held on January 7, 2016.

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In regards to the rationale behind the promotion, Robbiati said that “first of all, we — how should we acknowledge the fact that our network experience is much better than it’s actually perceived by the market to be. So we wanted to encourage customers to try our network.” Referring to the Sprint network, he said that “we had improved it across multiple dimensions, it’s being acknowledged not just by ourselves, but by independent observers in the marketplace and measurement companies like RootMetrics or Nielsen and Counters Magazines and Publications.”

Sprint’s relative network performance

Based on RootMetrics’ national results for 1H15, in the overall network performance metric, Sprint retained the third position among the top four US wireless carriers. The other carriers among the top four here are Verizon, AT&T, and T-Mobile.

Sprint also held its third spot in network reliability as well as the fourth spot in network speed metrics for 1H15. It also retained the last spot for the data performance metric. Meanwhile, its ranking dropped one notch to third in the text performance metric for the period.

Nevertheless, in the call performance metric, Sprint’s position improved one notch from 2H14 to the second spot in 1H15. Sprint shared this place with AT&T in 1H15.

For diversified exposure to telecom companies in the United States, you may consider investing in the iShares Russell 1000 Value ETF (IWD). The ETF held a total of ~2.5% in some of the US telecom players at the end of December 2015.

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