Sprint CEO Dan Hesse says that Sprint may raise prices when LTE footprint gets competitive

[S4GRU]

can someone tell me what the profit margin was for the quarter ?..we should not have to pay so much for investment into something we shoulda had

 

Waterproof Evo

 

Profit margin? What planet are you from? Sprint hasn't earned a profit for many, many years!

 

Robert

[pyroscott]

can someone tell me what the profit margin was for the quarter ?..we should not have to pay so much for investment into something we shoulda had

 

Waterproof Evo

 

Sprint posted a loss last quarter, and about every quarter for a long time.

[EliBohnert]

Sprint should make unlimited data $50 and then also have limited plans for less.

[Boosted20V]

Sprint should make unlimited data $50 and then also have limited plans for less.

 

Actually, Sprint should make everything free since apparently many in here dont understand Sprint is a business just like any of the other carriers.

[digiblur]

 

Regarding your last point, I doubt Sprint will ever compete with VZ based on LTE footprint. VZ's footprint is ridiculous compared to Sprint(Overall, 3G at this point) and even with the low frequency spectrum Sprint is freeing up, theres many areas I doubt Sprint would venture into with expansion.

 

SERO doesn't work with any 4g phones.

 

It would take Network Vision Part 2:The Expansion to be completed before they could think about competing in this area on the coverage level. Not to mention the bad taste still in everyones mouth. Still to this day I get funny looks and comments when they see I have Sprint. I know they are true but SeroP has kept me around. I doubt I would have stayed if it wasn't for Verizon's big expansion here from buying Alltel and buying the divested Centennial 850 licenses. Think they bought the equipment too but not sure. They had to flip it from GSM anyways.

 

Keeping many of the Nextel sites would have helped some for CDMA but we've beat that dead horse already. It's the typical network coverage rut that carriers get themselves in. No expansion for years, builds customer negativity over the years, no money or customer base to expand for, rinse and repeat. Takes years and local targeted marketing to flip those customers minds.

 

Some positives things.. I can easily get new flagship phones with absolutely zero waiting or pre ordering even on launch day. My phone still works at football games and other large events while all the ATT phones are dead in the water.

 

Sent from my C64 w/Epyx FastLoad cartridge

[JeffDTD]

As someone already said, the wireless landscape will change drastically in the next 8 years. I look forward to seeing their loss/operating costs vs. profit each quarter in 2014 when Network Vision costs are winding down and Iden is completely decommissioned. Sprint has to find a profit at that point otherwise they'll have no choice but raise/restructure pricing. The big bet is that they can sustain their current profitability while reducing costs to find a positive. It has to produce profit or we can look forward huge restructuring, a merger or partnership, or very different pricing in 2015. The unknown, in my mind, is just how much data the average user will consumer will use when they have a high speed unlimited mobile connection.

 

I would strongly encourage Sprint to keep the unlimited products at a higher price but also sell capped data at lower prices. Surveys done this year have shown that customers on capped data plans are less satisfied than customers with unlimited plans, but as time passes more will become acclimated to it. If I'm on a plan of, say, 2-3GB a month at a price lower than the big 2, and lets just say I had to pay $10 for every gigabyte- 1 gig over could cause my plan to be about the same as the big 2's metered plan but , say, unlimited data could be had for less than 2 gigs over.... That would be a value proposition for many customers while i'd just opt to keep my awesome unlimited tap.

 

Nothing to stress over. Sprint will always have to maintain a value proposition.

[4ginnc]

SERO plans get 15% off, while SOME corporate plans get 25%. So I don't think SERO is killing them.

 

My corporate plan gets 25% off, but only on the primary line. It used to be on all lines until a couple years ago and then it changed to just the first two lines on the family plan since they were grouped together at the same price. Then last year they split out the price of the primary line and second line of the family plan and stopped taking the 25% off the second line too. So, they've been raising my prices quite a bit already the last couple of years.

 

Although I still also get 25% on my broadband card since it's a separate line. And it's grandfathered with unlimited data which is one of many reasons I'll stick with Sprint.

[shifted]

Let's just say I am not with Sprint for their data speeds. If their prices start equaling ATT or Verizon I will go where I get the most for my money. Unlimited data doesn't mean much for me when I am at work or home 90% of the time on wifi and when I am on a commute I am reading text based news articles/rss feeds or forums...

Edited September 20, 2012 by shifted

[SpenceSouth]

Doesn't bother me one bit. No where in the article did he say that they will rise prices. Company's always have to consider raising prices when their in the financial state that Sprint is, just a part of any business. What was said in the article, however, is that they are NOT looking at raising prices for a good period of time. That should be satisfying for all of us.

[4ginnc]

Doesn't bother me one bit. No where in the article did he say that they will rise prices. Company's always have to consider raising prices when their in the financial state that Sprint is, just a part of any business. What was said in the article, however, is that they are NOT looking at raising prices for a good period of time. That should be satisfying for all of us.

 

I read this the same way. Nothing changing right now, but just like any business they will reevaluate the situation in the future. Obviously I hope they stay with unlimited data and I think they will for quite some time. However, they've already eliminated it on their broadband cards and wi-fi hotspots so it is not out of the question that it might happen on smartphone plans in the future.

 

For now, though, until the state of their network improves it's really their main selling point. Coverage is not as pervasive on a national level as Verizon or AT&T and we all know how bad they let their 3G network get.

[BenChase7]

Doesn't bother me one bit. No where in the article did he say that they will rise prices. Company's always have to consider raising prices when their in the financial state that Sprint is, just a part of any business. What was said in the article, however, is that they are NOT looking at raising prices for a good period of time. That should be satisfying for all of us.

I read this the same way. Nothing changing right now, but just like any business they will reevaluate the situation in the future. Obviously I hope they stay with unlimited data and I think they will for quite some time. However, they've already eliminated it on their broadband cards and wi-fi hotspots so it is not out of the question that it might happen on smartphone plans in the future.

 

For now, though, until the state of their network improves it's really their main selling point. Coverage is not as pervasive on a national level as Verizon or AT&T and we all know how bad they let their 3G network get.

 

I agree, I've watched people on boards go into a hypertensive crisis for years about Sprint raising prices and/or getting rid of unlimited data... neither of which have happened.

[runagun]

Lol, wow this has truly been taken out of context. He was giving an example on what he can and can't do. He even said right after that they weren't contemplating it and not for media to take it out of context. Wow, disappointed in cnet or whoever started this.

[ahecht]

SERO doesn't work with any 4g phones.

 

No, but SEROP does (SERO plus a $10/mo SERO Premium fee) with the added Premium Data $10 fee. My EVO 4G LTE is running on a grandfathered SERO plan, so I pay $50/month ($30 500 minute SERO + $10 SEROP + $10 Premium Data). That's about a 44% discount over a Everything Data plan with Premium Data ($90), and I get an extra 50 minutes. It's also almost 30% less than the EPRP ("new SERO") plans.

[RichardXy]

Once again the places that get upgraded last will get screwed. We paid the $10 smart phone fee for years with super slow 100 kbps data speed while others enjoyed wimax. Now the places that get LTE last will probably get a big price hike right when LTE gets to their area. If Sprint raises prices, they should do a phased roll in and raise the prices first in areas that had early LTE implementation. That would be fair to the rest of us. I know it won't happen but it should.

[drhenning]

Profit margin? What planet are you from? Sprint hasn't earned a profit for many, many years!

 

Robert

 

Sprint has gotten improved positive EBITA but the debt costs for interest hurt the bottom line.. Much of the growth comes from folks buying Smartphones and data charged.. Also increased volume.. Sprint has been using its fairly solid cash flow from operations to build out the netwrok and it also has taken advantage of lower interest rates by refi's...

[Feech]

Not sure how I feel about this and my opinion may change with time, but right I'm thinking from pure logic only. If Sprint were to raise rates to a point that would be close to Verizon or Sprint and by close I mean about $20 bucks a month I think I would have to bail. I love Sprint and have been with them a very long time and I'm not one of the ones that thinks Sprint owes me anything, but I really have to start thinking about all the coverage that was spotty to horrible over the last 5 years or so, and especially in the last 2 and I never complained just kept paying my bill. To suddenly have price not be an option and let service be the determining factor would be very different for me and I believe others, I'm not sure Sprint would come out on top in my mind. This is all speculation of couse and may change over the next year or so.

[Bob Newhart]

They will undoubtedly start disallowing SERO plans to be renewed at some point as they don't make jack from those contracts, so as long as they still have a decent customer base, they won't be hurt by losing those customers. Their customer satisfaction numbers will probably go up as well once they dump all those contracts.

 

I have two SERO lines, my bill each month is $100 plus fees plus pretend taxes plus real taxes = $116. They make money off that, its not too much different than a non-SERO family plan.

 

They will raise the 'fees' before the advertised plan costs, they have been doing this for years, all cell companies have.

[wtsguy]

Which is why Sprint has, as its price ceiling, whatever VZW charges. Which, mark my words, will decrease as time goes on.

 

Did you misspeak here or do you really think Verizon prices will go down over time? Mobile costs have gone up over the recent years, not down.

 

I have no loyalty to any company, I will always go where it's cheapest. If Sprint raises prices, I will recalculate where it's cheapest to be and I will go there. I can say that Sprint hasn't earned any good will from me at all with the way my service has been since I became a subscriber several months ago. Most of the time I would categorize my service as completely unusable (either no data, or dropped calls, or slow data) and even today when I have LTE/NV towers all around me the service is just as bad as it was 4 months ago. Once the network improves to "usable", that doesn't give Sprint an automatic pass to raise prices IMO.

[pyroscott]

I have two SERO lines, my bill each month is $100 plus fees plus pretend taxes plus real taxes = $116. They make money off that, its not too much different than a non-SERO family plan.

 

They will raise the 'fees' before the advertised plan costs, they have been doing this for years, all cell companies have.

 

My non-SERO family plan with 25% discount for 2 phones was around $170... $54 per month is a huge difference when it comes to profit margins.

[S4GRU]

I don't see any postpaid carrier dropping prices. They are so dependent on incoming cash flow. I just don't see that happening unless they were losing customers and already having their cash flow reduced.

 

Robert via CM9 Kindle Fire using Forum Runner

[iansltx]

Did you misspeak here or do you really think Verizon prices will go down over time? Mobile costs have gone up over the recent years, not down.

 

I have no loyalty to any company, I will always go where it's cheapest. If Sprint raises prices, I will recalculate where it's cheapest to be and I will go there. I can say that Sprint hasn't earned any good will from me at all with the way my service has been since I became a subscriber several months ago. Most of the time I would categorize my service as completely unusable (either no data, or dropped calls, or slow data) and even today when I have LTE/NV towers all around me the service is just as bad as it was 4 months ago. Once the network improves to "usable", that doesn't give Sprint an automatic pass to raise prices IMO.

 

I didn't misspeak.

 

For a given basket of functionality, prices have gone down for wireless service, though you may have to go prepaid to get the benefit.

 

Five years ago, you couldn't get an unlimited voice plan for a reasonable price anywhere. Now you can get unlimited voice and text everywhere...as long as you aren't on a contract plan...for $40-$50 per month.

 

Of course, this is because everyone wants, and is willing to pay for, expensive data plans now. Gone are the days when people has an EDGE iphone on the network, or a Blackberry, and only consumed a few hundred MB, if that, over the cellular network in a month. So pricing models have adjusted.

 

Five years ago I was paying quite a bit less for service than I am now...on SERO ($5 or so less for insurance, $20 less for data). However back then my usage was routinely in the 500MB per month range, with an every-once-in-awhile spike to a gigabyte or two. I'll have to look at my past bills to confirm, but I guarantee that my data usage has gone up with my new phone, and I guarantee that the subsidy Sprint's paying out to Samsung has gone up from what they paid HTC for my Mogul (I bought the Touch Pro outright).

 

As an aside for SERO-haters, mark my words, I would be on a different carrier, or at the very least paying less money to Sprint (would be on some non-contract plan, using my cell as a non-main-line), were it not for that plan. Sprint is still making money on me, just like they're making money on Virgin Mobile customers paying $55 per month for unlimited voice, unlimited messaging and 2.5GB of data, who are using more minutes messages and data than I am. But I digress.

[wtsguy]

I was going to say... If Sprint isn't making money on a $50/mo SERO plan, then they're doing something very wrong.

 

I don't know the first thing about running a cell company, but the way I see it - using my phone doesn't cost them money. Whether I use the phone or not they have to pay for tower costs, backhaul, etc. I don't believe there is a per minute or per megabyte cost to the companies as they'd like us to believe.

[S4GRU]

I was going to say... If Sprint isn't making money on a 50/mo SERO plan' date=' then they're doing something very wrong.

 

I don't know the first thing about running a cell company, but the way I see it - using my phone doesn't cost them money. Whether I use the phone or not they have to pay for tower costs, backhaul, etc. I don't believe there is a per minute or per megabyte cost to the companies as they'd like us to believe.[/quote']

 

Sprint isn't making money on anyone. They haven't turned a profit in a long time. However, I recognize that you probably are referring to whether the costs of a SERO customer are covered by how much they pay. If that's true, it must not be much. Otherwise they would continue to promote it to help draw in customers. But it may not be a loss.

 

Robert via CM9 Kindle Fire using Forum Runner

[spotmeterf64]

We won't see any lowered prices as long as smartphone customers demand $800 devices be sold at $200. That's a huge subsidy for the phone itself to be made up, then remember the constant network upgrades and buildouts required to be competitive.

 

When NV is complete next year, the work really has only just begun. Sprint has to add towers to new areas, enhance coverage in old areas that have a higher density now (my area of RDU was fields a decade ago. Now it houses at least 25k people). My area of RDU that was all but unpopulated a decade ago has fairly poor Sprint coverage. No coverage in my apartment whatsoever.

[WiWavelength]

We won't see any lowered prices as long as smartphone customers demand $800 devices be sold at $200.

 

Keep in mind those "$800 devices" sold for $200 are really more like $300 devices propped up to be "$800 devices." But the carriers and especially the device manufacturers are laughing all the way to the bank with the current contract-subsidy model. If it were to go away, then devices would be sold at retail with much smaller profit margins.

 

AJ