Sprint’s New Subscription Offer: Double the Data, Double the Confusion

When Marcelo Claure, Sprint’s new CEO, said last week that the first thing the company planned to do to stop bleeding subscribers would be to cut prices, he wasn’t kidding. He delivered the Family Share Plan on Monday. And it appears to be good enough to displace T-Mobile US Inc. (NYSE: TMUS) as the reigning champion of low-cost wireless subscriptions.

The plan does not actually cut prices, but essentially gives away more data for the same price. Sprint can afford to do that because it is building out a network, the capacity of which exceeds current demand. And building out the network is Claure’s second priority for boosting Sprint’s customer base. The strategy he is choosing to follow is a shrewd one — make a really good offer and then build what you need to make good on that offer. Claure’s advantage is that he gets to start with some excess network capacity, with more capacity on the way to add even more customers.

Provided they can understand the offers. The Family Share Pack is built on the model established for family plans from AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) that have been around for years. Customers buy a data package, unlimited text and calling services, and pay extra for additional lines and devices to share the data package.

If a family of four owns all its phones or is financing the phones through Sprint’s Easy Pay program, that family can get 20 GB of data for $160 a month, compared with only half that amount for the same money from AT&T or Verizon. The confusion comes from all the variations when customers add lines and apply discounts and promotions. Of course the plans from AT&T and Verizon also get confusing at this point, so Sprint is not any worse. But it could have been better — and that’s the point. Sprint not only has to be cheaper, but better — and they appear to have missed that in this case.

A recent study by RootScore places the Sprint network as fourth out of the four major U.S. wireless carriers. Sprint’s network build-out has got to change that or the company is toast. Claure and SoftBank chief Masayoshi Son had better be figuring out now how they plan to promote their new network when it arrives. We suggest cheap, simple and fast as the buzzwords. If they can achieve that, Sprint stands to be a big winner.

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