Sprint May Surprise All By Undercutting Carriers In The Unlimited Calling Plan

One after another, three of the major U.S. carriers this week rolled out flat-rate calling plans. AT&T (NYSE: T) and Verizon Wireless (NYSE: VZ) unveiled $99.99/month unlimited calling plans, and T-Mobile USA took it a step further by including text and picture messaging.

Now we know why. The beleaguered No. 3 U.S. mobile service provider Sprint (NYSE: S) Nextel is expected to offer a flat-rate calling plan at up to a 40 percent discount to its rivals, according to Reuters today. Analysts are saying that it could be considerably less expensive, at rates as low as $60 a month.

At that price, it would be considerably lower than even the trials Sprint is currently conducting. It has been testing plans in four markets with unlimited voice, text and Web access for $119.99 and $149.99. But Sprint's new CEO Dan Hesse is expected to do something extreme to stop the massive customer departures. In a USA Today story, Hesse said he was considering flat-rate pricing for unlimited voice calls with the goal of driving sales through the roof. He said: "If we can't be different, we can't win."

Since almost the beginning, the U.S. wireless industry has relied on big buckets of minutes at reasonable prices to drive sales and win customers over from competitors. It will be interesting to see if an unlimited pricing plan war will result in a lot of defections when most people today may feel that they already have more minutes than they know what to do with.

In the Reuters (NSDQ: RTRSY) story, Bear Stearns analyst Phil Cusick said if "Sprint prices closer to $60 for unlimited voice, that would create much more marketing stir and be a real differentiator, but would risk an eventual response from competitors," he said.

Related

• Now T-Mobile USA Announces Flat-Rate Too; SMS/MMS Included For $99.99


• AT&T Joins The Flat Rate Bandwagon, Hours After Verizon Wireless; Only Voice


• Verizon Rolls Out Unlimited Flat Rate Monthly Calling Plans