Sprint: The price is right

Wed, 05/20/2009 - 8:35am
Andrew Berg, Wireless Week

Sprint claims Palm Pre customers will save $1,430 with the Simply Everything plan over the course of a two-year contract compared with other offers. But do the numbers add up?

While the Palm Pre and iPhone cost the same at $199 (Sprint gets to that price point via a $100 mail-in rebate), the unlimited plans offered by Sprint are in fact cheaper than those offered by AT&T. However, the numbers don’t quite match the $1,430 in savings stated in yesterday’s press release from Sprint.

Here’s the breakdown. Sprint offers its Everything Data Plan, which includes unlimited texting, for $69.99 with 450 minutes, or for $89.99 with 900 minutes. If users decide to go with the Simply Everything Plan, they’ll get just that – simply everything for $99.99. That includes unlimited voice, texting and data.

Should consumers decide to go to AT&T and the iPhone, they’ll find the same tier of prices for voice, but on top of their voice service, they’ll have to spend $30 for unlimited data and $20 for unlimited texting. That puts the iPhone with unlimited data, texting and voice at $149.99 per month.

To review: Unlimited everything with the Palm Pre at Sprint = $99.99; Unlimited everything with the iPhone at AT&T = $149.99. Based on simple math, the Palm Pre with Simply Everything offers users $1,200 in savings over the course of a two-year contract when compared with the same unlimited plan at AT&T. But that’s $230 short of what Sprint claims consumers can save.

What accounts for the discrepancy? A spokeswoman for Sprint said the carrier added an additional $9.99 per month estimated on the fact that AT&T and Verizon Wireless don't include navigation with their other PDA and smartphone plans. She said that while AT&T does include it with the iPhone, it is not included with other PDA and smartphone plans. Sprint's Simply Everything includes turn-by-turn navigation.  

Meanwhile, Mark Siegel, executive director of media and analyst relations for AT&T Mobility, would not comment on recent reports that AT&T is looking to adjust the pricing on its data service plans. However, Siegel did point out one differentiating factor between AT&T’s GSM technology and Sprint’s CDMA that he thinks offers the iPhone superior value.

“Because of the technology that Sprint uses, you cannot do simultaneous voice and data. With AT&T’s GSM network, you can do that. If you receive a call on that CDMA network, however, while you’re in the middle of a data session, you’d have to drop the data session,” he said.

Julien Blin, principal analyst and CEO at JBB Research, said that he doesn’t see any reason for AT&T or Verizon to adjust their price plans in the short term. “AT&T and Verizon don’t really have any reason to do so. The only carrier that might do that is maybe T-Mobile because they’re known for their competitive prices.”

Blin said that in the end, though, it’s going to be about getting customers to believe in Sprint’s network and customer care.

“The question with the Pre is would people be willing to switch to Sprint Nextel given that they don’t have the best network and they haven’t yet proven themselves in customer care. I don’t know if [the Pre] is going to be enough, but I think they’ve done a good job with the device . . . so let’s wait and see,” Blin said.

More Broadband Direct 05/20/09:
•  Comcast adds ESPNU to lineup, online
•  Verizon broadens reach of DSL service
•  Sprint: The price is right
•  Moody's puts DirecTV ratings on review for upgrade
•  Cisco wraps up purchase of Tidal
•  AT&T to expand netbook distribution
•  Motorola works on de-wiring Europe
•  Smartphones still shine amid declines in handset sales
•  Yahoo aims for personalization in Internet search
•  Broadband Briefs for 05/20/09



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