Sprint's New Pricing Plans May Not Be Enough To Curb Churn

[Ron Burgundy]

By Marina Lopes WASHINGTON (Reuters) - Sprint Corp's cellular plan with more generous data allowances may fall short in overcoming defections by clients concerned about disruptions in the No. 3 cellular carrier's network, analysts say. "The challenge for Sprint is that existing prices are still too high and they are slow to reprice the base because of the enormous finiancial impact it would have on a company with margins as low as theirs," said Craig Moffett, analyst at MoffettNathanson. Sprint's shares are down 50 percent so far this year, hammered most recently by the collapse of its longtime plan to acquire T-Mobile US Inc, a move that could have reduced competition and created a stronger competitor to industry leaders Verizon Communications Inc and AT&T Inc. Analysts said the pricing strategy unveiled by newly appointed Sprint Chief Executive Marcelo Claure could backfire and cause further customer defections, already high as the company undergoes a network overhaul that has caused disruptions in service.

View the full article