Friday, October 31, 2014

Sprint Offers Credit to Customers Leasing iPhones

U.S. operator Sprint has created plans called iPhone for Life, which enable its customers to lease all iPhone 6 models starting at US $20.00 per month for the 16 GB option and all iPhone 6 Plus models starting at US $25.00 per month for the 16 GB option for 24 months. These options are also available starting at US $30.00 and US $35.00 per month for 12-month leases. Starting on 14 November, subscribers may also lease any iPhone 5S model for 24 months with a monthly payment starting at US $18.00 for the 16 GB model. From 10 October to 15 January, existing Sprint customers will get a “Loyalty Service Credit” of US $15.00 when they lease any of these iPhones. The promotional credit can be applied to the monthly cost of leasing one of the devices, which results in a monthly fee of US $5.00 for the iPhone 6 and US $10.00 for the iPhone 6 Plus. After the contracted period, users can continue leasing the phone on a month-to-month basis, return it and discontinue the service, purchase the phone or exchange the old iPhone for a new one. Sprint customers continue to receive the US $15.00 credit beyond 15 January as long as they have an active lease and a qualifying plan.

Sprint continues to aggressively create promotional offers for new and existing customers. However, this promotion differs from most of the operator’s previous promotional offers in that it is directed at current customers and does not target the pricing or content of a plan. As U.S. operators, including Sprint, have been moving away from 24-month contract phone subsidies and toward a no-contract phone financing model, customers have gained the ability to switch operators with greater ease, but at the cost of higher device expenses.
Sprint’s promotional leasing offer is a unique method, currently not offered by any of the other U.S. MNOs, of returning to the subsidized phone model for customers who do not want to pay full retail price for a phone that they will likely resell. For example, leasing the iPhone 6 under Sprint’s promotion will cost a total of US $120.00 over 24 months compared to the total US $650.00 if purchased or financed from any of the MNOs. In addition to the highly attractive low phone expenses, Sprint subscribers will not need to worry about reselling an old device once a new model is released and dramatically devalues it. On the one hand, Sprint’s one-of-a-kind offer could reduce churn, as the cost of buying out the phone in order to switch operators will likely be viewed as prohibitive by many subscribers. On the other hand, the generosity of the offer coupled with the fact that even the iPhone 5S is included may indicate that fighting churn is particularly important for Sprint at the present time.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:

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