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Will Sprint’s (NYSE:S) 50 Percent Discount Deal Be Able to Attract Customers?

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By on Financial

The chief executive officer of Sprint (NYSE:S), Marcelo Calure, recently announced that the company will be offering its services at half its usual price to those customers who are willing to change their network from AT&T (NYSE:T) and Verizon (NYSE:VZ) to Sprint.

The CEO further announced that the deal will remain in force until and unless the customers change their rate plan. To sum up, not only did Calure offer a discount of 50 percent to the customers who changed their network, but he also guaranteed that the rates would not be increased in the long term. This deal is not only an aggressive move on part of Sprint, but it also showed how the company is not looking forward in snatching customers away from a major carrier, T-Mobile (NYSE:TMUS).

This move of Calure showed that the company will not allow T-Mobile to achieve its goals and leave Sprint behind. It is important to note here that the chief executive of T-Mobile recently stated the company’s plans of moving ahead of Sprint and becoming the 3rd largest mobile carrier in the region of America. Perhaps this aggressive move by Sprint was a result of T-Mobile’s threat.

It will not be wrong to say that Sprint (NYSE:S) has to overcome a lot of hurdles, but the good news is that Calure has at least put his company back onto the track. Now the company’s future depends on the number of customers who change their network, and the quality of services that Sprint (NYSE:S) can provide to these customers at half the price.

Let’s look at the prices that the customers will have to pay if they change their network from Verizon and AT&T to Sprint. AT&T provides a shared plan of 10 GB at a rate of $260 whereas Verizon offers the same plan at a price of $240. Now, if the customers shift this plan from AT&T and Verizon to Sprint, they will be charged with a monthly bill of $130 and $120 respectively. The rates of Sprint will still be lower even if we include the phone cost in the plan. AT&T and Verizon’s monthly total stand at $284.83 and $264.83 whereas the shift would cause the monthly total to drop to $210.16 and $220.16 respectively.

If the customers change their network from AT&T or Verizon to Sprint (NYSE:S), they will definitely experience a low quality service, for Verizon was declared the winner after RootMetrics compiled its survey results. Verizon received highest marks when it came to data, speed, reliability and call performance. Sprint (NYSE:S) on the other hand, was unable to get high marks.

Coming to the current stock prices of Sprint (NYSE:S), the company, on the last trading day of December 9, 2014, started its stocks at a price of $4.63 and closed at a price of $4.57, after hitting the highest price of $4.67. The company has a total market capitalization of $18.79 billion.

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