(Adds additional subscriber code, no changes to text)
By Marina Lopes and Carey Gillam
OVERLAND PARK, Kan./WASHINGTON Aug 18 Sprint
Corp on Monday unveiled a new pricing plan that offers
customers 20 gigabytes of data and up to 10 lines for $100,
doubling its data offerings, the latest in a string of price
cuts and promotions sweeping the wireless industry.
Sprint's chairman, business tycoon Masayoshi Son, is betting
new prices will revive a carrier hampered by an expensive
network overhaul and rising competition.
"The message is simple: We are back in the game. We are
going to offer most competitive value for American consumers,"
Marcelo Claure, Sprint's newly appointed chief executive told
Reuters in an interview.
The company will release new plans for individuals later
The announcement marks the first move for the new CEO, who
last week said cutting prices would be his top priority.
The move comes after Verizon slashed prices for its
unlimited talk and text plan and T-Mobile expanded its family
plan to 6 lines and could signal more price cuts ahead for the
industry as a whole.
Sprint is going it alone after scuttling a months-long
effort to pursue a merger with No. 4 U.S. cellular provider
T-Mobile US Inc.
Last year, an aggressive campaign by T-Mobile to address
subscriber frustrations and lower prices sparked a domino effect
that caused the U.S. top four carriers to restructure pricing
plans and cut rates to lure customers in a nearly saturated
But analysts worry the industry's latest discount spree
could increase pressure on already tight margins and rattle
While top carriers AT&T and Verizon have
largely been able to mitigate the impact of T-Mobile's discounts
on their subscriber base, they would likely have to respond to
price cuts at Sprint with steep discounts of their own to keep
subscribers from migrating, analysts said.
"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," said Angelo Zino, analyst at S&P Capital IQ.
New pricing plans that charge customers separately for the
cost of their devices have somewhat offset price cuts this year,
Zino said, but if the discounts continue, they could pose a
long-term threat to the dividends.
Son, CEO of Sprint's parent company, SoftBank Corp,
said earlier this year he wants to start a "massive price war"
in the United States and warned that with Claure as CEO price
competition will likely heat up.
But many question whether Sprint, with $27 billion in net
debt according to the company's latest filings is in a financial
position to fuel a price war with its competitors.
"Do they have the balance sheet? Not really, but the good
news is that they have a major investor in SoftBank, so they
have the potential to get more aggressive" said Zino.
(Reporting by Marina Lopes in Washington and Carey Gillam in
Overland Park, Kansas; editing by G Crosse)