Following the recent leadership change, Sprint is offering a new family plan that provides 20GB data at $100 for a maximum 10 lines.
For people who are willing to switch to Sprint’s new “Family Share Pack,” the company will reimburse up to $350 of the early termination fee for their old wireless carriers.
Here is how the new Sprint family plan works. The monthly fee per-device varies. For monthly data allowance more than 20GB: If you get non-discounted phone with Sprint Easy Pay, you will pay $15 per month per device; if you choose to get a discounted phone by enrolling in a two-year contract, that’s going to cost you $20 per month for each device. Tablets and mobile broadband devices can join the plan with additional fees.
Sprint said the new plan provides shared data at a per-gigabyte price lower than its competition. For example, for a family that has four lines, it costs $160 per month to share the 20GB data ($100 for data allowance + 4*$15 per non-discounted phone). At AT&T and Verizon, the cost is estimated to be at least $210 per month for the same data plan.
Note that the above chart shows how $100 can buy you 20GB at Sprint but only half of the data bucket at AT&T and Verizon. In addition, with Sprint, a family plan with four lines will need to pay $170 to get an 8GB plan, which is actually more than the $160 for 20GB. The thinking behind it, as the Consumerist noted, is that most people will never come close to using their 20GB data every month.
“Sprint can dangle all that extra data out there and pretend like you’re getting a great offer. So people who switch to the new Sprint plan may be saving money on a per-gigabyte basis, but they will likely leave lots of unused data on the table every month,” Chris Morran wrote in his article on the Consumerist. “The only consumers who would benefit from the new Sprint plans are true data hogs that use more the 4 to 5GB of wireless data per month and are tired of being throttled or paying overage fees to their providers.”
The new data plan pricing marks the first move for the company’s new chief executive, Marcelo Claure, who said last week it would be his top priority cutting prices. He also admitted that the company still has far to go in improving its wireless network.
In a recent study published by RootMetrics, Sprint performed poorly across the board while Verizon ranked top for reliability, speed, data, call and text performances. Sprint also remained as the slowest carrier in terms of average 4G LTE rates in another test conducted by CNET examining the speed of the four major wireless providers.
“When you have a great network, you don’t have to compete on price,” Claure said. “When your network is behind, unfortunately you have to compete on value and price.”
Sprint has decided to drop its bid for its rival T-Mobile U.S. and will announce more “aggressive pricing plans”; Verizon went back to basics with a $60 single line plan with unlimited talk and text plus 2GB wireless data; and T-Mobile unveiled a promo that undercuts AT&T on a four-line, 10 GB family plan.
Analysts said carriers would likely respond to Sprint’s price cuts with more steep discount of their own to keep their subscribers.
“We will see a trickle down in pricing concessions across the industry. This is the start of a price war many anticipated would be coming,” Angelo Zino, analyst at S&P Capital IQ, told Reuters.
The new Sprint family plan will launch Aug. 22 with a limited-time offer that adds 2GB per line each month for free. Claure said Sprint will announce more pricing for individual plans later this week.