Sprint Nextel Corp. (S) recently announced the launch of unlimited plans for voice, text and data services. The service, known as Sprint Unlimited Guarantee, would offer unlimited data for $30 a month on smartphones and $10 per month on other phones. In addition, voice and messaging services will be offered for $50 for subscribing to the first connection and thereafter will be charged less for subscribing to additional connections.
After declaring its successful merger completion with Japanese telecom company, SoftBank, Sprint’s recent move towards product differentiation and promoting its brand signifies its aggressive take on establishing its foothold against major rivals AT&T, Inc. (T) and Verizon Communications Inc. (VZ).
Sprint is focusing on revenue growth in the core Sprint platform business. In this platform, increasing penetration of smartphones, in particular Apple Inc.’s (AAPL) iPhones and the $10 data premium plan are accelerating post-paid wireless subscriber growth and average revenue per user (:ARPU) with an improving churn rate.
With regard to prepaid, Sprint’s multi-brand like Boost Mobile, Assurance Wireless and Virgin Mobile as well as innovative offers like the $50 Monthly Unlimited plan with Shrinkage, Beyond Talk plans and Broadband2Go are making significant contributions to the company’s subscriber growth. Additionally, the company started offering the popular iPhone through its no-contract prepaid Virgin Mobile brand and WiMAX service via both prepaid Virgin and Boost Mobile.
Sprint’s core platform business also depends upon the success of its multi-billion dollar restructuring program known as Network Vision. Through this plan, the company is concentrating on the core Sprint platform, which includes CDMA, WiMAX and LTE technologies, and the eventual termination of the Nextel platform (iDEN business). The company began the deployment of CDMA voice on 800 MHz in the first quarter and is further expected to deploy LTE on 800 megahertz by the fourth quarter of the year. This network restructuring enabled the company to abort the Nextel platform, ultimately removing higher expenses of running two separate networks. The company expects the Network Vision deployment to be over by the end of 2013, two years ahead of the original schedule.
Sprint has a Zacks Rank #3, implying a Hold rating.
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