Earlier this week, Sprint introduced a new offer for current Verizon and AT&T customers looking to switch service — same amount of data at half the price. We noted at the time that the major catch to this deal is that you have to pay full price for your new phone when you switch (or pay $200), but how much would that cut into your savings? According to one top Sprint exec, quite a lot.
As we pointed out in our original story, getting the half-off deal from Sprint requires that you not just jump ship from AT&T or Verizon but that you also get a new phone through Sprint using either its Easy Pay system (which charges full price but in monthly installments) or by paying full sticker price for your new phone outright.
Even though AT&T and Verizon have been nudging customers into similar installment programs like AT&T Next and Verizon Edge, most current subscribers are still on plans where they buy discounted phones in exchange for agreeing to two-year contracts with their provider. By one estimate from Verizon, only around 2% of its customers are on Edge.
So while jumping to Sprint would indeed cut the monthly amount customers are charged for data/voice/text, those savings would be partially offset by the added cost of paying off a full-price phone.
Speaking earlier this week at a Merrill Lynch conference, CFO Joe Euteneuer admitted that a switching customer’s savings would not be exactly half of what it was at AT&T or Verizon.
“They are still probably getting a 20% sort of net discount,” he explained.
For 20% off their bill, we could imagine lots of people jumping ship between AT&T, Verizon, or even T-Mobile, as they all provide high-speed LTE service. But until Sprint can get demonstrate that its LTE network is reliable and fast, it will probably only win over customers looking to save a bit of money in exchange for a possible loss in service quality.
by Chris Morran via Consumerist
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