MONEY cellphones

3 Promotions That Show Sprint Is Desperate for Your Business

Sprint store sign
Andrew Harrer—Bloomberg via Getty Images

Sprint is offering crazy-sounding deals right now, including hand delivery of new phones. But that doesn't mean the wireless provider offers good value.

Sprint just announced that it will hand deliver new phones to customers’ homes and then help them set up the devices. The new promotion is set to start in Kansas City (near Sprint’s Overland Park headquarters) before rolling out to Miami, Chicago, and the rest of the United States.

Yet for anyone paying attention to the industry, the promo reads more as an act of desperation than a great deal. Though Sprint has been holding on to about 16% market share for the last few years—about the same as T-Mobile, and half as much as top-two carriers Verizon and AT&T—it has poor customer satisfaction rates and an especially high “churn” rate, or percentage of customers who dump their provider each quarter.

To be fair, the “D” word gets thrown around a lot when cellphones are being discussed. Last year, T-Mobile CEO John Legere accused AT&T of being “desperate” by offering a $450 buyout plan for customers who jumped ship from rival carriers. Then, days later, T-Mobile upped the desperation ante by offering its own $650 buyout plan—and AT&T quickly (and quietly) ended its offer. And it’s not just wireless carriers: Reviewers of HTC’s new “Uh-oh protection” program have called the deal desperate, since it offers a free replacement if you break your phone within the first year. Even iPhone users with AppleCare+ don’t get totally free phone replacements.

But Sprint in particular has garnered much attention over the years for especially desperate-sounding promotions. Here are 3 signs the company really, really wants your love.

1. Sprint will meet you at Starbucks, the gym, or wherever

The company’s new hand-delivery promotion offers a time-window precision that might make even Amazon Prime customers jealous.

“We will deliver pretty much anywhere… and it’s an exact-on-time delivery,” Sprint vice president Rod Millar told The Verge. “You can tell us ‘6:45, and meet me at McDonald’s.'”

Sounds convenient, but also potentially awkward—particularly for the Sprint “expert” who gets to roll up in this extremely cool-looking car and wait for you to finish ordering your fries.

2. Sprint will cut your AT&T or Verizon bill in half

This past December, Sprint announced it will now give you a 50% discount off whatever monthly fee you were paying AT&T or Verizon if you cancel your plan and switch.

Of course, the company also uses the promotion to get you locked into one of its various device programs. Those include the “iPhone for Life Plan,” which is not so much a chance for you to get a free new iPhone every few years (like it sounds) as it is a lease program in which you pay a monthly fee on top of your service charges—and do not technically own the phone.

3. Sprint will give you $550 to ditch T-Mobile

If you trade in your T-Mobile phone, you get $200 upfront from Sprint, plus up to $350 per line for dropping your T-Mobile contract.

Given that Sprint is in serious danger these days of slipping behind T-Mobile in the cellphone wars, this promotion makes sense. In 2014 alone, the company bought back more than 3 million phones from rival carriers.

Then again, if it wants to earn back market share, the service provider might want to focus less on promotions and more on, well, service. Sprint’s poor coverage kept it off of MONEY’s Best Cellphone Plans list last year, and despite some improvements, the company still ranks below its peers according the most recent report by RootMetrics, a company that rates mobile plans.

MONEY Tech

Google Wants to Sell You Cell Phone Service

Google is reportedly planning to become a wireless provider by piggybacking off of Sprint and T-Mobile's networks.

TIME Mobile

Google Is Reportedly Prepping a Wireless Service

The Google Inc. company logo is seen on an Apple Inc. iPhone 4 smartphone in this arranged photograph in London, U.K., on Wednesday, Aug. 29, 2012.
Bloomberg/Getty Images

New initiative would expand Google's quest to provide the world's Internet access

Google has been providing ultra high-speed home Internet to select cities for several years — but now it wants to be your mobile carrier, too.

The company is reportedly planning to launch its own cell phone service, according to The Information and the Wall Street Journal. Google has made deals with T-Mobile and Sprint to resell portions of their networks under a Google-branded name, a common practice by small wireless carriers known as mobile virtual network operators. Though T-Mobile and Sprint would still own the networks, Google would set its own prices and deal directly with customers.

Neither a launch window nor a price range for the service were disclosed.

Launching a wireless service would be another big step in Google’s quest to deliver Internet service directly to customers. Google Fiber is already providing broadband access in several U.S. cities, Project Loon aims to use balloons to bring remote areas online, and the company’s big investment in SpaceX could be a sign that it wants to use satellites to expand Internet connectivity as well.

But well-established ISPs and telecommunication companies won’t simply stand idle as Google takes their business. Sprint is reserving the right to renegotiate its terms with Google if the new service proves popular, according to the Journal.

Google and T-Mobile did not immediately respond to requests for comment. Sprint declined to comment.

TIME Smartphones

You Can Now Rollover Your Unused AT&T Data Into the Next Month

The AT&T logo is seen on June 2, 2010 in
AFP—Getty Images The AT&T logo is seen on June 2, 2010 in Washington DC.

But you'll only have that month in which to use it

AT&T users tired of watching all their extra megabytes melt away at the end of the month have reason to rejoice — the mobile carrier just announced Rollover Data, an upgrade that allows customers to transfer their unused plan data into the following month.

The data that rolls over will only last for one month, which means, for instance, that if you have 5 GB that carried over from last month but only use 3 GB of it, you’ll lose the rest.

The announcement on Wednesday is AT&Ts latest salvo in the tussle with rival provider T-Mobile, which announced a similar rollover feature a few weeks ago.

But AT&T CEO Ralph de la Vega told USA Today that his company, which had pioneered the rollover concept for voice minutes years ago, has been planning to launch Rollover Data for a long time.

TIME Mobile

T-Mobile to Pay $90 Million to Settle Cramming Case

T-Mobile
Bloomberg—Bloomberg via Getty Images An employee sets up a new Samsung Electronics Co. Galaxy 3 smartphone for a customer at a T-Mobile US Inc. retail store in Torrance, California, U.S., on Monday, Nov. 4, 2013.

Wireless carrier had originally called FTC lawsuit "unfounded"

T-Mobile has agreed to pay at least $67.5 million in customer refunds to settle claims that its customers were the victims of cramming, the Federal Trade Commission said Friday. Cramming is a once-common tactic in the telecom industry through which third parties hide unwanted charges for things like horoscopes and love tips in customers’ wireless bills.

In addition to the refunds, T-Mobile will pay $18 million in fines and penalties to attorneys general in every state and Washington D.C., as well as a $4.5 million fine to the Federal Communications Commission.

“Mobile cramming is an issue that has affected millions of American consumers,” FTC Chairwoman Edith Ramirez said in a statement. “Consumers should be able to trust that their mobile phone bills reflect the charges they authorized and nothing more.”

The FTC originally filed a lawsuit against T-Mobile over cramming claims in July. At the time, T-Mobile CEO John Legere, who has staked the company’s reputation on being more fair to customers than rival wireless carriers, called the allegations “unfounded and without merit.” T-Mobile did not immediately respond to a request for comment Friday.

T-Mobile will be required to contact all current and former customers who had unwanted charges crammed into their bills and offer them refunds. The company will also have to get customers’ consent before putting third-party charges on their bills in the future.

The T-Mobile case is the latest in a series of cramming settlements that the FTC has brokered. AT&T agreed to pay $105 million in refunds and fines for cramming charges in October.

TIME Companies

T-Mobile to Refund $90 Million for Unwanted Charges

A T-Mobile banner in New York City on Sep. 27, 2014.
Daniel Bockwoldt—Daniel Bockwoldt/picture-alliance/dpa/AP Images A T-Mobile banner in New York City on Sep. 27, 2014.

The mobile phone company had originally called the complained “unfounded and without merit”

T-Mobile agreed to refund its customers at least $90 million for placing unwanted third-party charges on phones, the Federal Trade Commission announced Friday.

If approved by a U.S. District Court, the wireless carrier’s agreement to refund customers for so-called “mobile cramming” would resolve a FTC lawsuit that was initially filed in July, when the company was accused of billing customers for unwanted charges, including horoscope, love tip and celebrity gossip services. T-Mobile allegedly received 35% to 40% of each charge, the FTC said in its July lawsuit, and it was reportedly difficult for consumers to get the refunds they were seeking from the company.

Along with T-Mobile resolving the lawsuit, the phone carrier will also pay additional fines, including $18 million to attorney generals across the U.S. and $4.5 million to the Federal Communications Commission, according to the FTC.

“Mobile cramming is an issue that has affected millions of American consumers, and I’m pleased that this settlement will put money back in the hands of affected T-Mobile customers,” said FTC Chairwoman Edith Ramirez.

A representative from T-Mobile was not immediately available for comment on Friday.

But the company’s top executive has previously commented on the case. After the complaint was filed by the FTC on July 1, T-Mobile’s CEO John Legere made the following statement on the company’s website: “We have seen the complaint filed today by the FTC and find it to be unfounded and without merit. In fact, T-Mobile stopped billing for these Premium SMS services last year and launched a proactive program to provide full refunds for any customer that feels that they were charged for something they did not want.”

He added, “We believe those providers should be held accountable and that the FTC’s lawsuit seeking to hold T-Mobile responsible for their acts is not only factually and legally unfounded but also misdirected.”

This article originally appeared on Fortune.com

MONEY Tech

How AT&T and Verizon’s Loss is Your Gain

A customer walks into a Verizon Wireless retail store in Washington, D.C., U.S., on Thursday, Oct. 23, 2014.
Andrew Harrer—Bloomberg via Getty Images

Get ready for better promotions, lower prices, and more choices.

Change is afoot, and it’s been a long time coming. After T-Mobile T-MOBILE US INC TMUS 0.17% officially kicked off its Un-Carrier campaign in early 2013, the domestic wireless industry was bound to change. CEO John Legere has spearheaded the company’s Un-Carrier strategy, launching a number of aggressive pricing plans and other offers. T-Mobile has since followed up with a string of other new promotions and initiatives, tempting potential switchers to take the plunge.

Meanwhile, Sprint SPRINT NEXTEL CORP. S 0.85% has been struggling, and the No. 3 carrier is counting on its new leadership to turn the tide. Now, the two top dogs, AT&T AT&T INC. T 0.75% and Verizon VERIZON COMMUNICATIONS INC. VZ 0.52% , are starting to feel some competitive pressure as they lose their duopolistic grip on the U.S. wireless industry — and just this week, both companies tempered investor expectations for the current quarter.

Verizon sticks to the high-end

Verizon kicked things off with a news release on Monday that indicated demand for 4G smartphones remains “very strong,” and the carrier continues to see momentum in this department. On top of that, Big Red saw 75% of smartphone upgrades qualify as high quality.

Then came the bad news. Verizon is spending heavily on promotional offers, which is helping drive volumes this quarter. These promotional expenses are expected to pressure its wireless segment EBITDA and will put a dent in profitability. At the same time, the No. 1 carrier also acknowledged that retail postpaid disconnects are on the rise due to intense competition and promotions from rivals. Translation: Verizon is spending big on promotions but continues to lose customers.

AT&T is also feeling the burn of churn

Just a day later, AT&T CFO John Stephens spoke at an investing conference, similarly indicating that the company expects postpaid churn to increase in the fourth quarter. Though Ma Bell will close out 2014 with “one of [its] best years ever” in terms of full-year postpaid churn, this could be the beginning of a troubling trend.

Stephens explained this is the first year that the new Apple iPhones were launched simultaneously on all four carriers, and because AT&T has the largest install base of iPhone users, it similarly faces higher competition targeting iPhone users. However, this is actually incorrect, as the iPhone 5s launched on all four carriers in 2013.

The CFO also dodged a question about whether or not 2015 will see full-year postpaid churn levels rise compared to 2014 — competition is only going to continue escalating.

Can you hear me now?

None of this is to suggest that AT&T or Verizon are seeing a mass exodus of subscribers that will cripple their respective businesses — far from it. Rather, small cracks are starting to appear in the armor of the top two players. Both companies continue to have the largest subscriber bases in the U.S. and have been relatively resilient to pricing pressures, in part because of public perceptions around rivals’ networks.

Carrier Total Retail Subscribers (MRQ)
Verizon 106.2 million
AT&T 86.3 million
Sprint 45.9 million
T-Mobile 42.0 million

Source: SEC filings. MRQ = most recent quarter. Figures do not include wholesale connections or connected devices.

That’s especially true for T-Mobile, which has long suffered from these negative connotations. But T-Mobile has made impressive progress modernizing its 4G LTE network during the past 12 to 18 months. I personally switched from AT&T to T-Mobile recently and saw my cellular data speeds soar by five times in my area (Denver).

T-Mobile is absolutely catching up in terms of network quality and, over time, it will dispel the perception that its network is inferior — the primary goal of its current Test Drive offer. Once that is achieved, price will be the determining factor, and T-Mobile has shown its willingness to go straight for the jugular when it comes to pricing.

Sprint’s fortunes are a little less clear. The carrier stagnated under Dan Hesse and paid dearly for technological missteps including its original choice of WiMAX over LTE. Meanwhile, the company’s heavy debt load — even after the SoftBank capital infusion — limits its ability to invest heavily in network infrastructure upgrades that are extremely capital intensive.

To be fair, Verizon also has a massive debt load after buying out Vodafone’s stake in Verizon Wireless, but the company’s network is already quite mature, so its capital needs are less intense.

You’re the real winner of competition

Competition is only going to pick up in the coming years. T-Mobile has made it quite clear that it has no intention of letting up anytime soon, and it will continue to push against its larger rivals. The Un-Carrier even believes it can overtake Sprint in total customers by year’s end.

The net result of all of this is that you, the consumer, will benefit in the form of better promotions, lower prices, and more choices.

 

TIME Mobile

T-Mobile Now Lets You Roll Over Your Unused Data

T-Mobile
John Macdougall—AFP/Getty Images A Deutsche Telekom T-Mobile logo hangs under pink umbrellas at the stand of the German telecommunications giant at the 2014 CeBIT computer technology trade fair on March 10, 2014 in Hanover, central Germany.

For customers who buy additional data on top of their plans

We’ve all been there: Every month, a slice of our mobile data plan goes unused, only to disappear into the ether forever at the end of the month. Now, one carrier aims to put an end to that.

T-Mobile will start rolling over customers’ unused data from month-to-month, the carrier announced Tuesday. That unused data will get added to what T-Mobile is calling a “Data Stash,” where customers can use it for up to a year to avoid going over their plan’s monthly data limits.

“With Data Stash, when you buy additional high-speed data, there’s no need to lose what you don’t use,” T-Mobile CEO John Legere said in a statement.

T-Mobile is rolling out Data Stash for customers on “Simple Choice” plans who buy at least 3GB of additional smartphone data or 1GB of additional tablet data above their plan’s base rate. Qualifying T-Mobile customers will start out with 10GB of data in their Stash.

T-Mobile has a history of making bold moves to shake up the wireless carrier industry, like offering to pay competitors’ early termination fees for customers who switch to the service before their contracts are up. T-Mobile’s competitors, including Verizon, AT&T and Sprint, have often followed T-Mobile’s moves, but it remains to be seen if they’ll play ball this time: Overage fees charged to customers who exceed their monthly data limits are a lucrative source of income for wireless carriers. T-Mobile’s aim here is most likely to forego some of those fees in favor of attracting rivals’ customers fed up with overage charges.

The Data Stash announcement came during T-Mobile’s “Uncarrier 8.0″ event, during which the company also touted its recent speed improvements to wireless broadband services in several cities, including New York.

MONEY

Why Sprint Is in Trouble

Sprint store
Andrew Harrer—Bloomberg via Getty Images

The nation's third-largest carrier is losing customers left and right.

Let’s be honest, most wireless carriers aren’t adored by their customers. But if we look at some of the data on Sprint SPRINT NEXTEL CORP. S 0.85% it appears the company has the most unhappy customers in the wireless industry. Based on the rate at which customers leave the company and two independent surveys, the nation’s third-largest carrier is struggling to please its customers.

Churn rates don’t lie

Let’s start with the wireless industry’s plum line for how well a carrier holds on to its customers — churn rate. Churn is the percentage of customers that leave a carrier for another network. In Sprint’s most recent quarter the company had a postpaid churn rate of 2.18% — the highest of all major US carriers.

In the company’s fiscal Q2 2014 earnings release this week, Sprint said it lost 272,000 postpaid subscribers in the quarter. Net tablet additions hid some of the worst news that a whopping 500,000 phone subscribers left in the three month period. That’s terrible news for Sprint and its investors.

By comparison Verizon had a churn rate of 1.00%, AT&T’s AT&T INC. T 0.75% was 0.99% and T-Mobile’s T-MOBILE US INC TMUS 0.17% was 1.6% in each of their most recent quarters.

Of course there are a few factors that play into churn rates other than a customer being dissatisfied with a carrier, but on the whole the lower the churn rate the better the indicator customers are happy with their current wireless provider.

But let’s assume for a minute that Sprint has a higher churn rate than its competitors for some reason other than customer dissatisfaction. Well, then we could look to other sources for whether or not Sprint’s customers are truly unhappy.

The list no company wants to be on

A recent survey commissioned Zogby Analytics for 24/7 Wall Street showed that Sprint topped a list for one of the worst customer service companies. More than one in five survey respondents said Sprint’s service was “poor.”

This comes as Sprint was fined $7.5 million by the FCC earlier this year for violating “do-not-call” requests by its customers. To be fair, Sprint’s not the only one. AT&T is paying $105 million to settle FTC charges that it added unauthorized charges onto its customers’ phone bills.

But even before this survey came out, Sprint’s been known for its lackluster reputation among the public.

An ongoing problem

Last year Consumer Reports published a survey showing that Sprint was in dead last place among cell phone carriers, according to the publications’ readers. While the Consumer Reports took into account factors like voice calls and data, the most telling indicators came from Sprint’s customer support.

For “ease and speed of getting through phone system to appropriate support staff” Sprint received Consumer Reports’ worse-than-average rating, as did the company’s rating for how well customer issues were resolved. The highest rating Sprint got was “average” for how knowledgeable the company’s staff was. Not exactly a stellar report card.

This is isn’t helping things either

According to data from RootMetrics, in the first six months of this year Sprint had the worst performing network of all the major wireless carriers.

Source: RootMetrics

Sprint trailed the pack in network speed, call performance, and data performance, while barely beating T-Mobile for reliability and text performance.

Fortunately, Sprint’s in the process of updating its old 3G network with 4G LTE and is bringing its ultrafast tri-band Spark network to more cities. On top of that, Sprint just replaced its former CEO with billionaire Marcelo Claure, the founder of the wireless distribution services company, Brightstar. With a new network and a new leader, RootMetrics thinks Sprint’s last place finish could be short-lived.

While Sprint’s clearly making changes to reverse its place among competitors, the company needs to focus on its industry high churn rate. Competition among wireless carriers is stronger than ever, and with T-Mobile’s aggressive offers and superior network, there are some clear benefits for Sprint customers to switch to the “uncarrier” network.

I think Sprint has a long road ahead of it in changing its place in the wireless industry. The company could stand to take a few pages of out T-Mobile’s branding book. Sprint CEO Marcelo Claure reportedly asked his vice presidents “Why would anybody want to buy a Sprint phone?” after he took over the job — and they had no answer. If that’s the case, it’s no wonder why Sprint customers are likely asking themselves the same thing.

MONEY cellphones

Hey AT&T Customers: It May Be Time to Give Up Your Unlimited Data Plan

woman walking past AT&T store
Bloomberg—Bloomberg via Getty Images

AT&T and other wireless carriers may continue to offer unlimited data plans, but they're not the great deal they once were.

Almost half of all AT&T mobile customers are still clinging desperately to a grandfathered cellphone plan with unlimited data, according to a survey from Consumer Intelligence Research Partners (CIRP). But that choice is looking particularly unfortunate in light of the Federal Trade Commission’s latest lawsuit.

In a complaint filed Tuesday, the federal agency alleges that AT&T has been slowing data speeds for consumers on “unlimited” plans, in some cases by up to 95%. The practice of reducing data speeds for heavy users, called “throttling,” can make it very difficult to complete routine tasks like browsing the web or using GPS navigation. In some dense metro areas like New York and San Francisco, AT&T allegedly throttled users who consumed as little as 2 GB a month. Altogether, the New York Times estimates, about 25% of AT&T’s unlimited data plan customers were affected.

“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” FTC chairwoman Edith Ramirez says in a statement. “The issue here is simple: ‘unlimited’ means unlimited.”

AT&T calls the charges “baseless” and says it warned customers that heavy users could be throttled. But while AT&T’s alleged behavior is particularly egregious, the carrier wouldn’t be the only one to limit data use on so-called “unlimited” plans, as Ars Technica has reported.

For example, Sprint’s My Way plan promises unlimited data for the life of the line of service, but read the fine print: The carrier also throttles the top 5% of its users, as part of its “network management” strategy. Sprint says that users who consume more than 5 GB are generally at risk for throttling, though it varies by month.

Likewise, while T-Mobile has repeatedly said it does not throttle its unlimited customers, its fine print notes that the top 3% of users might see their data slowed “during times and in places of network congestion.”

Similarly, Verizon throttles the top 5% of customers still on 3G. Verizon had planned to slow speeds for the heaviest users on 4G, but it shelved that idea after receiving its own stern warning from the FTC. Maybe Verizon has less to worry about—according to CIRP, it has already moved the vast majority of its customers off unlimited plans.

In fact, Verizon hasn’t sold a single new unlimited cellphone plan in two years. AT&T hasn’t offered an unlimited plan in four years. The two biggest American carriers have been trying to wean customers off of unlimited data plans for a while now, or else the wireless companies risk becoming victims of their own success.

First Unlimited Calls, Then Unlimited Data

The unlimited model was born in the late 1990s, when AT&T launched its first One Rate phone plan, explains Kirk Parsons, senior director of telecom services at J.D. Power. Customers loved the certainty: the same bill, every month, with no separate charges for roaming or long distance calls.

That model still made sense when the phone carrier introduced data plans for smartphone users—so much sense that by 2008, AT&T actually forced all iPhone 3G customers to buy an unlimited data plan. Back then, it was a moneymaker: You could offer unlimited data because people wouldn’t use a lot of it, and it didn’t cost a lot anyways. That’s all changed.

“When smartphones started coming out, the networks weren’t up to snuff,” Parsons says. “You couldn’t actually enjoy the experience of videos and downloads. Once 3G coverage widened, then we transitioned from 3G to 4G, that’s when you really saw people using data on their phones, streaming music, watching shows.”

Now, the carriers have created a nation of data addicts. As of December 2013, Americans consumed 269.1 billion MB of cellphone data a month—far more than double what they consumed a year before. It’s just too expensive to keep up with our insatiable demand. The carriers have to buy or lease radio frequencies all around the country to provide good service, says Logan Abbott, president of Wirefly.com. There’s only so much bandwidth.

“Consider it like a nationwide wifi network,” Abbott says. “If you have everyone in your house on one wifi connection—downloading, streaming Netflix, doing data-intensive stuff—your bandwidth is going to get used up … It’s going to put drag on your network.”

Of course, if AT&T acted as the FTC claims, consumers got a really raw deal. While the other carriers say they throttle just a small fraction of the heaviest users for network management reasons, AT&T is accused of slowing service for 3.5 million of its 14 million subscribers.

Still, limited data is the way of the future. Not that AT&T customers want to hear it—there’s a reason 44% of them haven’t changed cellphone plans in over four years. “It doesn’t necessarily make sense, but they like the security blanket of never being overcharged,” Abbott says. “They have a vintage product, and they don’t want to let go.”

Paying for More Data Than You Actually Use

The truth is, if you’re an AT&T user, it might be time to give up your unlimited plan. The first thing to do is check your account to see how much data you really use—it may not be as much as you think.

Slate has prepared some handy interactive charts that show how much data you’d have to use before an unlimited plan pays off, but this is the main takeaway: If you’re only using 1 or 2 GB of data—like most typical users—you’re likely overpaying for the unlimited option. You simply don’t need that much.

If, on the other hand, you’re using a lot more, the FTC says you’re being throttled—in which case, you might as well shell out a little more money for a data plan that actually delivers the speeds advertised.

Related:

Read next: This Is the Best Wireless Carrier for You

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