Sprint has been down on its luck for quite some time. The company suffered through a long period of wandering in the wilderness with poor customer service and defecting subscribers to the tune of over a million per quarter for years. This wasn’t helped by its merger with Nextel, a partnership that made little sense considering that both companies use different signal standards. It looked for some time that Sprint would simply collapse on itself. Lately, though, I’m beginning to think that this brush with death has made the company smarter than any other wireless company in the country.
It started when Sprint dropped a bomb on the industry by offering an unlimited plan for just $99 a month. Nobody was offering such a thing and it had never occurred to them to do so. After all, the wireless industry was built on a foundation of overages and per-use fees that spelled big bottom lines. It wasn’t long, though, before the other carriers started to follow along with unlimited plans of their own. Spint countered by dropping the “Simply Everything” plan down to $69 a month and introducing family plans that used the service. We used to pay $100 per month for two lines, 500 minutes, 300 texts on one of them, and unlimited data on one of them. Now we’re rocking 1500 minutes with unlimited everything else on both lines for the same price. That’s a real game-changer. That everyone else has been trying to follow their lead shows that Sprint is leading the field.
It’s also telling that their new 4G WiMax network from Clearwire doesn’t come with any overages. Most shocking, though, is that the CEO of Clearwire actively encourages users to consume as much data as they want without fear of disconnects or a surprising big bill. They really don’t care as long as you aren’t screwing up the network. Compare that with the cap-and-overage systems being introduced or trialed by wireline providers such as Comcast, Time Warner, and AT&T. Sprint’s efforts to move to flat-rate all-you-can-eat pricing in a world of trying to milk customers for every red cent is refreshing.
Sprint is also going to try another first: a “no questions asked” full refund of any device and service charges within the first 30 days if you don’t love your phone and service. That’s a pretty bold plan from a company that couldn’t count how fast their customers were fleeing for competitors. I’ve also found that their Twitter customer service ninjas can easily cut through red tape and get problems fixed fast. I had an issue with MMS pricing on my old Motorola Q9c that they wrapped up within an hour. How’s that for awesome?
But apparently adopting customer-friendly policies and competitive pricing just wasn’t enough. No, they also had to pretty much dominate the CTIA show with the unveiling of the world’s first 4G phone, the HTC Evo. Every iPhone fanboy from here to Maine jaw-dropped at the huge display, the dual-cameras for video chat, and the blazing speeds offered on the Clearwire network. Once the device launches this summer, it’ll probably outsell both the iPhone and Droid. After a very long time of having a ho-hum device line-up, Sprint’s the cool kid on the block with the phone everyone wants to have.
Ahead of many of these moves, Sprint decided to outsource its 3G CDMA network operations to Ericsson last year. It sounds like an odd move on the surface since most carriers want to talk about how great their network is. The reality, though, is that cellular providers actually lease many towers from third-party companies and patch their gaps in coverage with reciprocal roaming agreements. The odds of you using a tower actually owned and operated by your wireless company is a lot lower than they’d like you to know about. With the wireless network itself becoming somewhat of a commodity, it makes sense to spin off that grunt work to someone else to concentrate on services.
That’s why it also makes sense for them to only hold a majority ownership in Clearwire. Building a wireless network from scratch is expensive work, especially to ensure adequate nationwide coverage. Bringing in other partners ensures both that outside capital is helping fund expansion and that customers will be signed up from multiple sources. It also allows Sprint to continue to focus on being a service provider rather than a network operator, the only way they’re able to turn around the ill will they’ve built up. Clearwire isn’t painting itself into a corner either; they have full acknowledged a potential move to LTE in the future like the other major carriers. With the infrastructure already in place, they’ll be poised to quickly pick up the reciprocal roaming agreements they’ve been fond of.
It’s also telling that CEO Dan Hesse recently postulated that in the future, minutes won’t matter and it will all be bits. With the move to a high-capacity network and unlimited usage plans, it’s only a matter of time before every piece of data going over their network is IP packets. Sprint’s putting themselves ahead of this dumb pipe future whereas other carriers are trying in vain to find a way to kill it off.
I can’t think of any point that Sprint isn’t hitting on. They’re pushing true unlimited use for a flat, fair price using devices you want to own at speeds you want to use. They’re fully embracing the dumb pipe concept and treating the network itself like the commodity it is so that they can focus on the services they provide. I think other carriers would do well to try following Sprint’s example.