(S) Sprint Announces Holiday Discounts

Looking ahead at the Christmas and holiday season, Sprint (S) has announced discounted offering on wireless Broadband services. The company will now charge $50 a month for 6 gigabytes (GB) compared to its previous offer (launched in November 1) of $60 a month for 5 GB.

The discounted offer does not cover smartphone users but counts data downloads on tablets, mobile hotspots and laptops. The strategic decision to cut wireless data prices will help Sprint garner market traction as well as compete head to head with market Czars like AT&T (T) and Verizon (VZ) as both offer $50 per month for 5 GB.  Additionally, Sprint’s new offer is aimed at wooing more customers and driving revenues during the peek holiday season.

Sprint will also charge less for using extensive data services. It now offers an $80 per month plan for 12 GB compared to its previous plan of $90 for 10 GB. This new plan could give tight competition to Verizon’s $80 a month for 10 GB data plan.

Sprint has been charging the highest for its entire data plan historically and is now looking forward to re-pricing its offering to control further subscriber erosion on its network. Further, it also aims to emerge as one of the most customer oriented service providers in the market and increase its exposure to penny-wise end users.

Further, the company is progressing well on the Network Vision plan, which it announced last December.

We believe Sprint’s varied data plan offering coupled by its rich collection of smartphones including 4G, tablets and hotspots will remain a long-term margin driver and bode well for its earnings.

We are currently maintaining our long-term Neutral recommendation on Sprint. For the short term, the stock retains a Zacks #3 (Hold) Rank.

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