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Analysts not sure Sprint’s Latest Promo will Bring Customers

November 19, 2015 - Written By Alexander Maxham

On Wednesday, Sprint made an announcement which basically improved their “Cut your bill in Half” promo from last year. Sprint is claiming that they will cut Verizon, AT&T and T-Mobile users bills in half with this promotion. Additionally, Sprint is offering to pay up to $650 to switch, covering any early termination fees and device payments that may need to be made. Sprint did say that you won’t need to turn in a smartphone to switch and get your bill cut in half, however, to take advantage of the switching costs, you will indeed need to turn in your phone.

After this announcement, some analysts think this will bring in customers by the bucket, while others think it’s not enough to really make an impact. EverCore ISI analysts released a research note today stating “this may drive some uptick in subscriber attraction, we note [that] we believe the most cost sensitive subscribers likely took advantage of this offer the first time around.” They continue by adding that they “do not agree with Sprint’s contention that transitioning subscribers are likely to opt for higher data plans vs the discounted offerings.”

Meanwhile, Jennifer Fritzsche, an analyst for Wells Fargo, also released a research note stating she has “mixed feelings as Sprint has been adamant about providing the best value in wireless, but not at the expense of profitability. We had expected some level of promotional pricing entering the holiday quarter but admit this was more extreme than even we were looking for.” Fritzsche also stated that they do “believe the offer is attractive for customers and solves a customer pain point of shared data limits, as switchers will have the option of adding more data to their monthly allotment for roughly the same price.”

Here you have some analysts on one side of the fence, thinking that this might work well for Sprint, as the pricing does look a bit attractive. However, many people don’t switch carriers quickly, or often. And the more lines on their account, the less likely they are going to switch as it can turn into a headache. While this promotion doesn’t kick off for Sprint until tomorrow, November 20th and lasts through January 7th, we’ll have to wait and see what customers think about it. Currently, it doesn’t look too good for Sprint. But the churn rate will tell the whole story when we see Q4 numbers early next year.