By Michal Lev-Ram
Sprint announced early Thursday that it would offer an unlimited voice and data plan, one week after rivals Verizon Wireless, AT&T and T-Mobile launched plans that let users make as many calls as they want for $100.
Dubbed “Simply Everything,” Sprint’s (S) new service will also cost $100 a month, but unlike its competitors’ plans, the third-largest carrier is offering unlimited data services in addition to unlimited calls. Analysts had speculated that Sprint would try to compete with other carriers by offering a lower-priced plan for about $60. Instead, the company is offering more features for the same rate.
“This is not so much about price, it’s about differentiating our company,” Sprint chief executive officer Dan Hesse said Thursday morning during a conference call with analysts. “We’ve let our business get too complex, and we’re trying to make it simpler.”
In addition to unlimited nationwide calling, Sprint’s new plan will give users unlimited access to data services like text messaging, e-mail and Web surfing in addition to the company’s mobile TV, music and navigation services. It will be available on all the company’s networks — both CDMA and iDEN — starting Friday.
Verizon was the first to announce its service last week, but AT&T and T-Mobile followed just hours later. T-Mobile’s unlimited plan includes “all-you-can-eat” text and picture messaging, while AT&T (T) and Verizon (VZ) are offering unlimited domestic calls only. The unlimited plans were a first among major carriers, as wireless consumers typically pick rate plans based on how many minutes they think they’ll use per month and are stuck with paying steep fees (as much as 45 cents per minute) if they go over their allotted airtime.
Sprint, which posted a fourth-quarter loss of $29.5 billion Thursday, says it is hoping its new voice and data plan will help differentiate the company.
But even CEO Hesse admitted that “Simply Everything” won’t be enough to turn things around. Sprint faces significant challenges, including integrating Nextel’s network and repairing its poor customer service image. What’s more, it is bleeding customers — the company reported that it lost 683,000 subscribers in the fourth quarter.
“Our business is not performing well right now because we have not provided the right customer experience,” Hesse said Thursday. According to the CEO, a turnaround will not happen “for many quarters.”