If you're a wireless carrier and you can't provide better service, cutting prices sharply seems like a reasonable strategy. However, when a company fails to do both of these things and then lies about the latter, it really needs a reality check. I'm talking about Sprint, the wireless carrier with the worst network of the four leading U.S. providers.
Earlier this month, Sprint tried to entice customers to switch from AT&T and Verizon by offering to cut their data bills in half. That sounds good, but there's a huge gotcha lurking inside the offer. Oddly enough, it was the company's CFO Joe Euteneuer who shed some light on the murky situation, when he thought consumers weren't looking.
Speaking at a Merrill Lynch investors conference, Euteneuer said that the real discount is more like 20 percent. He also said that some of Sprint's existing rate plans actually cost less than the rates in its new promotion, according to an account on DSLReports.com.
Why the discrepancy? To take advantage of the deal, customers must buy or lease a new phone through Sprint Lease, Sprint Easy Pay (where you pay full price but in monthly installments) or purchase a new device outright. You can't bring your own phone, and if you don't turn in an old device you get hit with a $200 penalty.
That’s a lot of terms and conditions for what sounded like a straight forward deal.
Twenty percent is still a decent discount, but you get what you pay for. As I wrote last month, Sprint finished dead last in recent rankings of network speed and call performance conducted by RootMetrics. In fact, Sprint's network is so weak, its CEO readily acknowledges the problem.
"When you have a great network, you don't have to compete on price," said Sprint CEO, Marcelo Claure, last summer. "When your network is behind, unfortunately you have to compete on value and price."
Claure was being honest. Euteneuer was, at the very least, being disingenuous. Wireless plans today are hideously complicated, and it's often difficult to determine the best deal for you. Sprint's half-truths are just one more reason to avoid the carrier until it gets its act together.