Sprint Corp., the fourth-largest US wireless carrier, revealed that its Chief Executive Officer, Mr. Marcelo Claure, has decided the company will offer covering expenses for customers who switch to Sprint from rival telecoms, in addition to other aggressive marketing moves, only a week after taking over the helm.
Covering $350 of expenses to customers switching from rival telecoms was among the measures to be taken. Doubling the traffic for the same price as competitors was also announced to be introduced.
“The strategy is simple. We have to get back in the game.” CEO Claure said. “We did a lot of research with customers. Data use is growing exponentially; customers are getting angry at a bill that is larger than they expected. We decided to make it easy and double whatever is in the market. This is the best offer ever in the marketplace.”
The aggressive move comes as competition in the market is intensifying, and analysts see a price war already in progress.
“This is just the beginning,” Mitsushige Akino, executive officer at Ichiyoshi Asset Management Co. in Tokyo, said for Bloomberg. “There will be more price cuts to come, and I expect T-Mobile will fight back, as well.”
The new pricing plan of Sprint Corp. doubles the companys data offerings and comes as the latest in a series of price reductions and special promotions in the countrys wireless industry. Sprint Corp. also revealed that it plans to release new plans for its individual customers later this week.
In order for Sprint to be financially self sufficient in light of the upcoming huge costs, cutting expenses was pointed as a priority for Claure, who said he will make Sprint “leaner”.
“We started a comprehensive review looking at every dollar that is spent, and if there are things that don’t make sense, we will cut them fast,” Claure said. “I come from a low-cost industry, and I’m going to try to apply some of that methodology.”
Sprint Corp. was 1.23% down to close at $5.62 per share yesterday, marking a one-year change of -18.79% and valuing the company at $22.17bn. Pre-market trade took another 0.18% bite out of Sprint shares as of 8:07 GMT.
According to CNN Money, 18 analysts offering 12-month price forecasts for Sprint Corp. have a median target of $7.46, with a high estimate of $10.50 and a low estimate of $4.60. The median estimate represents a +32.74% increase from the last price of $5.62.
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