OVERLAND PARK, Kan.—Sprint Nextel Corp. has tweaked its Fair & Flexible price plans, leaving the dollar amounts the same on the basic voice plans, but changing the number of minutes for three of its mid-range plans and increasing the cost of overage minutes. The changes basically eliminate anytime minute price differences among the top three national carriers and appear to be Sprint Nextel’s antidote to customer migration to lower-cost price plans during the second quarter.
Sprint Nextel offers five Fair & Flexible individual plans on its Web site, ranging from $30 to $100 per month. The plans at the $40, $60 and $80 price points have been changed: for $40 per month, customers now get 450 minutes instead of 400. However, the anytime minutes were lowered on the $60 plan from 1,000 minutes to 900 minutes, and on the $80 plan from 1,400 minutes to 1,350 minutes.
On all individual plans, customers who go over their anytime minute limit will now have to pay $5 for a chunk of 30 minutes; previously, the deal was $5 for 50 minutes. Sprint Nextel also lowered the threshold beyond which customers must pay by the minute instead of in increments, and doubled the per-minute overage price from 10 cents to 20 cents. For example, a customer who signed up for a 200-minute, $30 monthly plan used to be able to buy overage minutes in 50-minute increments for $5 up to 700 minutes, and pay 10 cents per minute after that. Now, a new customer on a 200-minute plan would pay $5 for 30-minute increments up to 500 minutes, and pay 20 cents per additional minute.
“I think they’re trying to get people to select a rate plan a little closer to the number of minutes they need on a monthly basis,” said Allan Keiter, president of MyRatePlan.com, a consumer site which allows customers to estimate their wireless usage and compare plans among carriers. Keiter added that the move could encourage customers who had chosen a low-cost rate plan and were coasting along on cheap overage to bump up to a plan with more minutes—especially those on the $30 per month plan (a price point not offered by Verizon Wireless or Cingular Wireless L.L.C.) who might consider a revamped, and more attractive, $40 per month plan.
“It’s a pretty substantial increase, and it’s going to hit those people who chose the $29.99 plan,” Keiter said.
Sprint Nextel tightened its credit requirements during the second quarter and gained only 210,000 retail postpaid customers; executives also have said that during the second quarter, the company had a higher-than-expected migration of customers to lower-cost price plans.
For family plans, Sprint Nextel cut 100 anytime minutes off each of its plans at the $70, $90 and $110-per month price points, as well as lowering the threshold for incremental overages and upped the price of extra minutes from 10 cents to 20 cents.
The move brings Sprint Nextel’s price plans in lock-step with those from Verizon Wireless and Cingular; differentiation now rests on the cost of overage and additional services. Comparatively, both Cingular and Verizon Wireless offer a 700-minute family plan for $70 a month with additional minutes charged at 45 cents apiece.
