Sprint Expected to Cut Mobile Rates

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According to analysts, mobile service provider Sprint-Nextel is expected to offer flat-rate calling plans at up to a 40% discount to its rivals, possibly hurtling the industry into a price war. Although Sprint has yet to respond and spokeswoman Leigh Horner declined comment on any plans for future offers, analysts say the company could be considering an unlimited calling plan for as low as $60 a month to stem customer defections. This move comes after the two largest U.S. mobile service providers, Verizon Wireless and AT&T Inc, on Tuesday unveiled $99.99-a-month plans for unlimited calls, while T-Mobile USA went a step further by including text messaging in that price.

Wall Street seems none to happy about the news. "Our bigger concern rests with Sprint's plans and the potential for future additional competitive responses," Robert W. Baird analyst Will Power wrote in a research note. "It's sinking in how bad this could be for the industry," said Todd Rethemeier, an analyst for SurTerre Research, which is associated with Soleil Securities (full disclosure: Rethemeier owns some shares in AT&T.)

According to Rethemeier, if the new plans spark more rate cuts including a $70 plan from Sprint, AT&T and Verizon could see their wireless average monthly revenue per user be flat in 2008 and fall by 1 to 3 percent in 2009. Unless slowing subscriber growth cuts costs in a market where about 85 percent of subscribers already have cell phones, the fall in revenue could hurt carrier margins. "In a weak economy we could see a scenario where more people cut the chord at home and go completely wireless," he said. "These plans actually encourage that."

View: Full Story @ Reuters

(4 replies) #1 neufuse on 21 Feb 2008 - 01:41

How about a cheapo plan for those of us who only have cell phones for emergencies? I have one pay sprint $29.95 a month and never use the thing! I only have it for when I absoutly need it... would be nice if we had like a 1 hour a month plan or something for like $10...

#1.1 Greenstein on 21 Feb 2008 - 01:45

What about a prepay plan or buying wireless phone card minutes? This way you purchase a block of minutes and when they run out, buy some more.

Might save you on the monthly charges.

#1.2 Mathachew on 21 Feb 2008 - 02:12

(Greenstein said @ #1.1)

That's not a bad idea. My father-in-law did that until he needed more minutes, and since we had gotten rid of the house phone at the time. I have Sprint, so I wonder if I'll get a price reduction on my fair and flexible family pack...

#1.3 neufuse on 21 Feb 2008 - 02:36

I use to have verizon pre-paid and pay $15 a month to have it... then they raised the rates on that so high it was cheaper to get a real plan! plus most pre-pay plans don't let you roam... and sadly all the other plans around here that are pre-paid don't even have reception worth crap... T-Mobile was horrible (tried them)... Tracfone was jut as bad... Verizon was great! but then they jacked up the rates...

#1.4 VT-Vincent on 21 Feb 2008 - 05:51

(neufuse said @ #1)

I have found the best plan for emergency phones is through AT&T... you can buy a "Pay as you Go" GoPhone for about $20, and a $100 airtime card. They card is good for 400 minutes and it doesn't expire for an entire year... it averages out to less than $9/mo

#2 thornz0 on 21 Feb 2008 - 05:41

looks like Helio is in on it too, $99 for unlimited voice and data....i'd love to ditch crappy verizon phones for something like this, but the free in-network calls have me trapped, my family is all on it (and i still want them to call me).

#3 VT-Vincent on 21 Feb 2008 - 05:51

*Delete Me*

#4 Brandon on 21 Feb 2008 - 11:51

Its about time. I have always thought that mobile phone rates were way too expensive

(1 reply) #5 naap51stang on 21 Feb 2008 - 14:05

If Sprint had a better network, perhaps they wouldn't be suffering so much.
If you can only get a signal 20 miles from a major city or highway, what good is it?
People "expect" to receive a signal out in the middle of nowhere...if you can provide
the service, they will look elsewhere.

#5.1 XeonBuilder on 22 Feb 2008 - 06:30

I have worked around the country and I have been a sprint customer for years. They have fantastic coverage. And I have been from coast to coast and have rarely found any dead spots. Im not too sure where your from but if your having so many problems you might want to call up sprint and make them aware. I actually had a dead spot that I ran through on a daily basis and I called them up and they actually fixed the problem within a week of my call. Im not even kidding. I started getting a full signal there about a week after I called.

And lets not even get into a price war. Sprints prices are the lowest hands down. I was lucky enough to get on to the SERO plan and Im loving that price. $30 a month for 500 anytime min, Unlimited data and texting. Can you hear me now?

The only downside to Sprint has been the customer support since they merged with Nextel. Its not the same as it used to be. Sometimes you get through super fast and other times its a long wait with occasional disconnect.

#6 SirEvan on 21 Feb 2008 - 16:38

I hope this causes ATT to drop the price on their Blackberry data packages, I am not paying 90$ a month for voice, data, and texting. If I could get all 3 for 60$ I would, but 30$ for BB data package is out of control

#7 Ogmius on 21 Feb 2008 - 18:18

yah, I agree, I would like to see a data plan price war.. now thats worth talkin about! I pay $35 a month for unlimited internet and 200 text messages on my pda phone... my counterparts on razrs pay 20 for internet and unlimited text... I dont think thats fair ( have att btw)

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