Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
Well, that was an up-and-down week for Sprint, but what else is new.
First, Sprint managed to provoke T-Mobile US CEO John Legere to proclaim Sprint was “done” and not really a competitor any more. While the comment was filled with Legere’s regular level of hyperbole, I think it goes deeper.
Sprint has spent the past several weeks throwing out new offerings that look to provide additional value to consumers beyond simple price cutting. The new Family Share Pack replaced the ill-advised “Framily” plans, offering up to consumers unlimited voice, messaging and data buckets they have become familiar with thanks to its rivals.
Sprint then came out with single-line unlimited plans that undercut similar offerings from its competitors, including T-Mobile US. And, with the launch of Apple’s iPhone 6 and 6 Plus devices, Sprint went even cheaper with a $50 per month plan as well as its “iPhone for Life” program that includes a two-year lease on an iPhone and unlimited services for $70 per month.
While it’s still too early to know how much of an impact these offerings will have, Legere’s reaction would seem to indicate that he may be a bit concerned. Why stick the proverbial “fork” in a rival unless there is something to be worried about. Does it sound like Legere is just hoping beyond hope that Sprint is indeed “done?”
It would seem Legere would stand to profit from a further tanking of Sprint’s fortunes not just because it could mean more growth for T-Mobile US’ business, but it could also help boost T-Mobile US’ value, an important issue in the face of parent company Deutsche Telekom is still publicly shopping around T-Mobile US.
Following Sprint backing away as a potential suitor for T-Mobile US in the short term, T-Mobile US’ stock price took a bit of a dip that it not yet fully recovered from. For a company that has been almost manic in trying — and succeeding — to upend the status quo, seeing its stock price take a tumble can’t be good for that image.
Of course, Legere’s comments were also backed by claims that even if Sprint does manage to attract new subscribers, the carrier’s network remains in such a state of disrepair that those consumers will either flood Sprint’s customer care centers or flee. And, on this point, Legere is indeed on to something.
While Sprint has spent years and billions of dollars upgrading its network, beyond claims from the carrier of a superior experience, Sprint’s network quality does still appear to be lagging. The most recent J.D. Power survey found Sprint No. 4 out of four across all six geographic regions.
Sprint and some of its investors continue to point toward the carrier’s robust spectrum position in the 2.5 GHz space and the impact that spectrum will have on network quality, but until Sprint actually begins to put that spectrum to use in a meaningful way, those claims remain a bit thin. Additional concern was recently raised when newly installed Sprint CEO Marcelo Claure explained that the carrier would be measured in its rollout of 2.5 GHz support, with an initial focus on dense, urban markets. This would seem to make sense on a technical level as the 2.5 GHz band is not known for great propagation characteristics and would seem more suited to such urban deployments.
Sprint has maintained that it was on track to deploy its Spark network to cover 100 million potential customers by the end of this year, with Claure noting that the network was currently somewhere at 60 million pops covered. (Not to bring up Clearwire, but Sprint’s 2.5 GHz LTE coverage sort of makes Clearwire’s roughly 130 million pops covered with WiMAX look rather extensive.)
According to reports citing industry analysts, Sprint planned to scale back the 2.5 GHz rollout to just five markets, though it planned to provide a significant upgrade in network speeds across those lucky markets. This move is said to allow Sprint to market its superior network experience in those markets, thus opening up an avenue to take away customers from rivals.
However, this would seem to do little for Sprint’s broader image, which would include the other 200 million people living outside of those five markets. Sprint had initially suggested that it would expand 2.5 GHz support to all of its cell sites, thus providing a wide range of consumers with a taste of that electrifying Spark network. Now, it seems that only those people willing to live on top of each other will be able to surf the Internet at blazing speeds while standing shoulder-to-shoulder with their neighbors.
I would sum up the week for Sprint though as a win. Sure, it seems that the carrier merely took one step forward and one step back. But, for a company that has a recent history of mostly moving back, this week’s events were good enough to break out the party sparklers.
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for an extra:
—More Sprint commentary? Sure, why not.
All this talk about Sprint looking to watch its spending comes at a time when its chairman and majority owner just became the richest man in Japan.
According to reports, Masayoshi Son is worth more than $16 billion, thanks to the impending initial public offering of Chinese e-commerce site Alibaba, which Son’s Softbank owns a 34% stake in. Not that Son will look to now throw his new-found billions into Sprint, but I am sure it does make for some interesting conversation around water coolers in Overland Park.
—Speaking of awkward moments, Verizon Wireless has begun to roll out its voice over LTE service with coverage now said to be available across its entire LTE network. Customers can access the high-tech voice service from just a few devices, though that few include Apple’s iPhone 6 and 6 Plus as well as Samsung’s Galaxy S5.
The awkward part comes in with the fact that the offering does not seem to currently allow for a soft handoff back to the carrier’s slightly more extensive CDMA-based 3G network. Thus, if a customer were to somehow roam off of LTE, the voice call is dropped. How rude.
I know Verizon Wireless is claiming near parity in terms of coverage between its 3G and LTE networks, but personal experience with some Verizon Wireless devices has shown that real-world parity may not be quite up to snuff. It’s one thing to tout the number of people covered, or at least the places where those people live. But, most people remain a mobile lot, and thus coverage at home is often not quite the same as real coverage.
The rollout of VoLTE services should be interesting to watch … and hopefully hear.
I welcome your comments. Please send me an e-mail at dmeyer@rcrwireless.com.
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