Sprint CEO Marcelo Claure is considering putting an end to device subsidies in 2015. The carrier has been focusing on its lease programs lately such as the iPhone for Life and Sprint Easy Pay that the company's decision to eliminate subsidies will be determined on how the customers would take advantage of the programs.
Moreover, there has been an increasing trend among various carriers in the U.S. wireless industry lately wherein subsidies and two-year contracts are given less focus. Installment offers such as T-Mobile JUMP, AT&T Next, and Verizon Edge are now being promoted by popular carriers. So far, T-Mobile has been able to fully get rid of subsidies and contracts.
Sprint may just follow T-Mobile's subsidy and contract dropping scheme in 2015. The company said that it plans to continue on improving its network while striving to cut costs at the same time.
Sprint acknowledges the fact that it is losing money and plans to lay off around 2,000 of its employees. Though the company has outlined new offers as an attempt to undercut the competition, Sprint suffered in losing postpaid customers of 272,000 in the recently concluded quarter. The quarterly revenue is set at $8.5 billion. Its operating loss of $192 million is an improvement from last year's record loss of more than $358 million.
"Sprint is undertaking a comprehensive review of all expenses to optimize its cost structure and is targeting $1.5 billion of annualized cost reductions compared to 2014 spending levels," said the company. "Inclusive of recent work force actions, total labor cost is expected to decline $400 million on an annualized basis which will include internal and external labor costs."
As a way to prepare for its future plans, Sprint had started experimenting with its phone leasing programs for a number of devices such as the iPhone 6, iPhone 6 Plus, Galaxy S5 Sport and Galaxy S5. Under the phone leasing program, customers would have to pay as low as $20 for every month as a device rental or leasing fee.
Sprint will offer more cost-effective plans in order to attract new customers and keep the current subscribers. Though the data offerings have been boosted, Sprint has not increased their prices which prompted Verizon and AT&T to follow suit.
On its most recent earnings announcement, Sprint has gained a repositioning in the wireless industry race with its unlimited monthly data of $50 being dubbed as the best value that one can get in a wireless plan.
