Sprint raises stakes in the $99.99 unlimited battle

Sprint Nextel said on Thursday that it will include messaging, mobile Internet access, and some premium services as part of its new unlimited bundle costing $99.99.

Sprint Nextel upped the ante in the $99.99 all-you-can-eat rate plan battle Thursday by introducing a service that includes unlimited voice as well as unlimited data and slew of premium services.

Called "Simply Everything," the plan will give customers unlimited voice as well as unlimited data, text, e-mail, Web-surfing, Sprint TV, Sprint Music, GPS Navigation, and push-to-talk service for $99.99 a month. The company made the announcement during its fourth-quarter earnings call, in which the company also announced heavy financial and customer losses.

The new pricing plan is available to existing and new customers on both Sprint's CDMA network as well as its Nextel iDEN network starting on Friday. Current customers will not have to renew or extend their contract to switch to the service.

Sprint is also offering discounts for families subscribing to the high-end rate plan. Families will get a discount of $5 per month on every "Simply Everything" service that is added to the same bill for up to five additional lines. This means that two lines would cost $194.98 (or $99.99 plus $94.99). A third line would cost an additional $89.99.

Sprint is facing stiff competition. Last week, Verizon Wireless was the first to announce a $99.99 unlimited voice plan followed by AT&T and T-Mobile . Until Sprint's plan was announced, T-Mobile seemed to offer the most comprehensive offering--a $99.99 plan that includes voice, unlimited text messaging and picture messaging.

AT&T's plan is only for unlimited voice calls. AT&T customers can get additional messaging plans starting at $5 more a month with an unlimited messaging plan costing an additional $35 a month on standard phones.

Verizon's $99.99 plan includes unlimited voice and Internet access, and Web-based email. Customers can tack on additional services for a fee. For example, for $119.99-per-month, Verizon Wireless customers can get unlimited messaging. And for $139.99-per-month, they can get VCast video, VZ Navigator, and Mobile E-mail functions.

Clearly Sprint's offering offers customers the most bang for the buck. But some analysts have warned that if Sprint significantly undercut or added more services to the bundle for the same price that they could start a price war in wireless.

Dan Hesse, the company's CEO who took over the top spot at Sprint just before the end of 2007, said the new rate plan is not about matching competitors on price. Instead, he said, it's about making it simpler for customers to buy and use data services. And he hopes it will help differentiate Sprint from its competitors.

"The new battleground will be around data," he said during the earnings call on Thursday. "We want to put a flag in the ground that we are about data."

He also went on to say that the company has a long road ahead of it as it tries to put its failing business back on track.

" I want to emphasize that this is not a silver bullet," he said. "This ($99.99 pricing offer) is one of many actions we will take to turn things around for the company."

Indeed, Sprint has been suffering from massive customer defections as dissatisfied customers flee due to poor network performance and unhappiness with customer service. In the fourth quarter of 2007, Sprint lost 683,000 customers. And it expects more losses in 2008. It forecast that it would lose an additional 1.2 million customers who pay monthly bills in the first quarter of 2008. And the losses will continue in the second quarter, Hesse said.

"The major objective for us is to reduce churn by improving the customer experience across all touch points," he said. "That is the No. 1, 2, and 3 things we need to focus on."
 

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