By Sinead Carew
NEW YORK, July 11 Sprint Corp on Thursday
offered unlimited data services for the lifetime of an account,
as the No. 3 U.S. wireless operator looks to lure customers away
from bigger rivals Verizon Wireless and AT&T Inc.
The announcement came just a day after SoftBank Corp
closed its $21.6 billion purchase of 78 percent of
Sprint and two days after Sprint closed its buyout of Clearwire
Corp, which has a vast amount of wireless airwaves licenses.
Sprint already offers unlimited data services for a flat
monthly fee, but because of network capacity concerns analysts
have long questioned whether it would eventually be forced to
follow its rivals who charge consumers depending on the amount
of data they use.
Sprint Chief Executive Dan Hesse told Reuters the new
guarantee would reassure customers worried about leaving AT&T or
Verizon Wireless for Sprint only to have the offer of unlimited
services pulled at some point.
"Our research has shown that is a big issue for us in
attracting AT&T and Verizon customers," he said, adding that the
guarantee "clearly differentiates" Sprint from its rivals.
Hesse, who has been battling customer losses at Sprint since
he took on the top job in December 2007, said he had to complete
the Clearwire deal so Sprint could have "the capacity to be able
to offer an unlimited guarantee for life."
Without Clearwire's airwaves, Hesse said Sprint "would have
run out of gas" on capacity in a few years.
Sprint, which is years behind its big competitors in
upgrading to high-speed data services, is working on a
multi-billion dollar network to close the gap. It will use cash
from SoftBank and Clearwire airwaves to support the effort.
But while Sprint's ability to offer unlimited services at a
flat fee gives it a marketing advantage, BTIG analyst Walt
Piecyk thinks its success in luring customers away from rivals
will depend mostly on how quickly it can beef up its network.
"They need to change the perception of their network,"
SoftBank has said its top priority at Sprint will be to
improve the network as quickly as possible.
Analysts expect the SoftBank and Clearwire deal to amp up
competition in the U.S. wireless market because Japan's
SoftBank, run by billionaire Masayoshi Son, is famous for
aggressive pricing in its home market.
Son, who will be the Chairman at Sprint, also won a bitter
battle with Dish Network Corp Chairman Charlie Ergen to
buy both Sprint and Clearwire.
"The excitement for investors and consumers is that Sprint
now has the spectrum assets, the money to build its network and
a leader that has the courage to do it," Piecyk said. "Whether
they can execute on that remains to be seen."
Along with AT&T and Verizon Wireless, a venture of Verizon
Communications and Vodafone Group Plc, Sprint
also has to contend with tough smaller rival T-Mobile US Inc
, the No. 4 U.S. mobile service provider.
On the day that Sprint closed its SoftBank deal, T-Mobile
CEO John Legere announced his company would allow customers to
upgrade their phones every six months, which is four times more
often than its competitors.
Hesse declined to comment on any other changes Sprint and
SoftBank will put in place now that the deals are closed.
Sprint also made some small pricing tweaks on Thursday to
simplify family plans and service plans for individual
Under its latest offerings, smartphone users will pay $240
less per year than the customers of market leader Verizon
Wireless and $120 less per year than No. 2 U.S. operator AT&T
and T-Mobile US.
The shares of Sprint, which changed its name from Sprint
Nextel to Sprint Corp after the deal, will trade on a "when
issued" basis until Friday when it will begin trading again
under the S ticker symbol.