Beginning Sunday, the wireless carrier will reinstate a $125 to $250 deposit required from people subscribing to its Clear Pay calling plan, said Sprint PCS spokesman Dan Wilinsky. The company eliminated the requirement last May in an effort to increase subscriber numbers.
Removing the deposit achieved its purpose and boosted the number of sign-ups. But in the third quarter of this year, soClear Pay customers? accounts were terminated by Sprint PCS because they didn't pay their bills that the company lost more subscribers than it added.
New customers signing up for Clear Pay will be asked to pay the deposit, the size of which will depend on their credit history, said Wilinsky. He said that Sprint PCS made the move to "reduce churn," referring to the number of customers that leave and jump to a competitors' calling plans.
The Overland Park, Kan.-based carrier won't ask for a retroactive deposit from current Clear Pay customers, added Wilinsky.
Clear Pay and similar subscription programs that aim to boost customer base have always been pooh-poohed by financial analysts. New customers don't spend enough money on phone calls or extra services, such as wireless Web surfing, to make the expense of the subscriber strategy pay off for carriers, they say.
AT&T Wireless also has a "restrictive" calling plan for credit-challenged subscribers, said Ritch Blasi, a spokesman for the carrier. The deposit required ranges from $250 to $500, he said.
Sprint PCS has not said exactly how many customers it lost, but analysts believe it is between 8,000 and 50,000 customers. In June, Sprint reported that Sprint PCS had about 17.1 million wireless subscribers.
Former Sprint PCS president Charles E. Levine may have lost his job as a result of the Clear Pay snafu, a source told CNET News.com. Levine stepped down a week after the carrier announced the customer loss. Len J. Lauer, previously head of Sprint's long-distance division, assumed Levine's spot.