The carrier price wars have never been so entertaining until Thursday, when Sprint announced that it was "celebrating" the $49 billion AT&T-DirecTV merger by offering all DirecTV customers an entire year's worth of free wireless service.
The announcement is clearly a tongue-in-cheek move against AT&T, whose recently approved acquisition of the country's largest pay-TV provider was largely influenced by the fact that it could capture DirecTV's subscribers as its own. Just recently, AT&T announced that it was offering $500 in credits to DirecTV and U-Verse subscribers who switched over to its own network.
This is but the latest salvo thrown by Sprint into the cutthroat wireless industry as it struggles to hold on to its spot as the third largest carrier snatched away from it by T-Mobile.
"DirecTV customers love their TV service-but they shouldn't have to settle for AT&T wireless," Kevin Crull, Sprint chief marketing officer, says in a statement. "Why not build the perfect bundle by combining with Sprint wireless? We're winning awards across the country because our network has never been stronger, faster or more reliable, and our customers have never been more satisfied."
The offer includes unlimited calls and text and 2GB of data per month for the next 12 months. Customers can sign up from one to five lines. For customers who are currently tethered to a two-year contract with another carrier, Sprint is offering to pay off their old phone and contract to entice them to its own network. Those who are not on contract will also be able to sell their old phones to Sprint for up to $300 per line.
To avail of the offer, DirecTV customers simply need to upload their DirecTV bills on the signup website and proceed to obtain the offer online, via phone or through a local Sprint location. As is the case with these promotional offers, this is not entirely without cost. Customers will need to pay a one-time activation fee of $36 and the monthly taxes and surcharges. They will also need to pay for the cost of the accompanying device either by paying for it upfront or through Sprint's device installment or lease plans.
After the year is up, customers will have to pay for their wireless packages, starting from $50 a month for one line, $90 for two lines, $120 for three lines, $150 for four lines and $180 for five lines.
Although Sprint has added more than 300,000 subscribers in the last quarter, its first time ever to see a turnaround, the carrier continues to grapple as it keeps burning money for the sake of attracting new customers to give its network another chance. In the last three months that ended in June, Sprint spent $2.2 billion alone, even though it has stopped seeing annual profit nearly 10 years ago.
"The word 'crazy' comes to mind," Craig Moffett, senior analyst at MoffettNathanson, tells the Wall Street Journal. "They get a tip of the hat for making a marketing splash, but it is reckless for a company that is burning through its remaining liquidity at such a rapid rate to now start giving away service for free."
Meanwhile, AT&T has responded to Sprint's new offer, calling it "a desperate Hail Mary pass to a petite defensive lineman."
Photo: Mike Mozart | Flickr
