Sprint Nextel Committed to Unlimited Data Despite Gains by Verizon Wireless
Sprint Nextel remains committed to its unlimited data plans, despite Verizon Wireless’s and AT&T’s claims that they benefitted from the rollout of their plans during Q3, Sprint Nextel CEO Dan Hesse said Thursday during an investor conference call. “There are some temporary advantages that Verizon has due to its network, but we do not see making any changes to our rate plans,” Hesse said. “We're seeing absolutely nothing in any of our channels that indicates that the new rate plans that Verizon has is either helping or hurting -- to their credit, I don’t think it’s hurting them. Because of their LTE footprint advantage right now, they're … blasting right through, what we believe, are complex rate plans.” However, the carrier did announce new tiered-data plans for tablets Wednesday. The plans start at $14.99 for 300 MB and go up to $79.99 for 12GB, Sprint Nextel said. The carrier has long marketed its “Simply Unlimited” data plans, which began to see competition during the quarter from competing unlimited data plans from T-Mobile USA and MetroPCS (CD Aug 23 p5).
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No. 3 carrier Sprint Nextel lost a net 456,000 subscriptions during Q3, the carrier said Thursday. That loss is in contrast to reported gains by No. 1 carrier Verizon Wireless and No. 2 carrier AT&T -- Verizon Wireless said last week that it added a net 1.5 million new contract subscriptions during the quarter, while AT&T said Wednesday it added a net 151,000 subscriptions during that period. No. 4 carrier T-Mobile has not yet reported its Q3 results.
Verizon Wireless attributed its quarterly gains in part to the rollout of its “Share Everything” shared data plans, which debuted June 28 -- just prior to the start of Q3 (CD Oct 19 p12). AT&T Mobility CEO Ralph de la Vega told investors Wednesday that its own “Mobile Share” shared data plans had boosted the company during the quarter. AT&T signed up 2 million subscribers to its shared data plans during the five weeks after they became available Aug. 23, de la Vega said. About 33 percent of those customers signed up for the highest capacity plans. “We're thrilled with the progress,” he said.
Part of Sprint Nextel’s unlimited data strategy centered on it being the only carrier to offer such a plan for the iPhone line. It sold 1.5 million iPhones during the quarter. While the carrier boasted that about 40 percent of the iPhones went to new subscribers -- higher than Verizon Wireless or AT&T -- overall sales were lower. Verizon Wireless reported sales of 3.1 million iPhones during the quarter, while AT&T reported sale of 4.7 million.
Sprint Nextel’s net subscription loss was driven by the loss of 866,000 subscriptions from the carrier’s Nextel network, which it is continuing to shut down. The carrier expects to completely shut down the network by the middle of 2013. Sprint Nextel’s Network Vision LTE network upgrade plans are behind schedule. The carrier is a quarter behind its goal of upgrading 12,000 of its sites, Hesse said. Sprint Nextel said its Network Vision upgrade also drove up its revenue loss for the quarter. The carrier reported a net loss of $767 million for the quarter; it lost $301 million during the same period last year.
While it was anticipated Hesse would address SoftBank’s recent deal to buy 70 percent of Sprint Nextel, carrier Vice President-Investor Relations Brad Hampton told investors on the conference call that executives would not be taking questions on the deal because of “securities law issues.” Under the deal, announced last week, SoftBank would invest $20.1 billion in the carrier (CD Oct 16 p1).