Framily's a hit? Sprint CEO calls it fastest growing plan ever

The carrier's "friends and family" program hit the 1 million customer mark in less than 40 days. Sprint CEO Dan Hesse calls it the foundation for a "innovation and marketing" platform.

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Roger Cheng (he/him/his) was the executive editor in charge of CNET News, managing everything from daily breaking news to in-depth investigative packages. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade and got his start writing and laying out pages at a local paper in Southern California. He's a devoted Trojan alum and thinks sleep is the perfect -- if unattainable -- hobby for a parent.
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Roger Cheng
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Sprint's Framily plan may sound funny, but the company was quite serious when discussing its potential.

Framily is the wireless carrier's friends and family program, in which the discount increases with each additional member. It is also Sprint's best weapon against the aggressive pricing and promotional offers doled out by the likes of AT&T and T-Mobile, which caused the company to again post customer losses in the March quarter. Despite the continued defections, Hesse was high on Framily.

"Framily has a lot of legs," Sprint CEO Dan Hesse said during an investor conference call on Tuesday. "Today will just be beginning of what you'll be seeing moving forward in terms of leveraging it as a marketing and innovation platform.

Hesse teased potential changes and additions to Framily, which Sprint will unveiled at an event planned for later today. CNET will provide live updates from the press conference.

Hesse called Framily "the company's fastest growing rate plan on record," having added 1 million customers in less than 40 days.

Framily, however, wasn't enough to turn things around for Sprint in the first quarter. The company lost nearly half a million customers in the period, although it managed to narrow its losses.

Hesse said he expects growth to return with post-paid customers -- or higher credit customers who sign up for contracts and are deemed the most lucrative in the industry -- in the second half as its network improvements begin to wrap up.

Smartphone customer growth a concern

Perhaps more worrisome is the fact that what customers it did add largely purchased tablets. Sprint Chief Financial Officer Joe Euteneuer disclosed on the call that the company added 516,000 tablets in the period, a surprisingly strong number.

Yet if you strip out the tablets, the number of phone subscribers fell by almost 750,000.

"Sprint hasn't lost that many post-paid phone subscribers since mid-2009 (excluding the quarter in which it shut down its Nextel network), and they have never lost that many 'Sprint Platform' phone subscribers," said New Street Research analyst Jonathan Chaplin.

Sprint, the nation's third-largest wireless carrier by subscribers, continues to plead for patience and argues that customer growth will return once more of the network gets upgraded. Chaplin, however, noted that despite the recent improvements, the customer metrics seem to be getting worse.

When asked about Sprint's potential response to the competition, Hesse would only say, "More to come." He acknowledged that it was critical to get its network improvements completed, and said that would play more into the marketing message as time goes on.

Hesse seemed particularly confident in Framily, and while he confirmed there wouldn't be a rate cut announced today, he sounded like today's announcement was just the beginning.

"There's a lot we can do with it," he said.

Sprint shares rose 3 percent, or 22 cents, to $7.65, in premarket trading.