Sprint S -3.91% isn't being nearly disruptive enough.
The No. 3 U.S. carrier by subscribers announced new family plans late Monday, set to replace its puzzling "Framily" pricing arrangement later this week. The new plans offer more data for the money than those of Verizon Communications VZ -0.22% and AT&T T -0.45% and even undercut T-Mobile US TMUS +0.27% in some instances.
For Sprint, whose current prices are higher than peers' on the most popular plans, the move should at least slow its recent flood of subscriber defections. The carrier has lost a net 1.2 million of the most valuable postpaid subscribers over the past four quarters.
But the price cuts should mean lower margins and may not move the subscriber needle that much, particularly as Sprint's network still trails the rest of the industry. This is why many had expected Sprint to wait to lower prices.
Sprint's new chief executive Marcelo Claure, who replaced Dan Hesse earlier this month, was apparently unwilling to let the subscriber drain continue at this pace, though. The move comes against the backdrop of intensifying competition, mostly spurred by T-Mobile and after Sprint gave up on a possible merger with its smaller rival.
Under the new plans, a family of four can get 20 gigabytes of shared data for $160 a month—the same price AT&T and Verizon charge for 10 gigabytes. T-Mobile charges $100 for 10 gigabytes.
The new plans cost about $1 a month less on average than T-Mobile's unsubsidized plans, according to New Street Research. By comparison, Sprint's current prices are $7 to $10 a month higher than those of AT&T and Verizon and $10 to $15 above T-Mobile on the most popular plans.
Sprint is also offering a promotion, from Aug. 22 to Sept. 30, under which it will waive access fees, bringing the $160 plan down to $100. In addition, it will pay up to $350 in early-termination fees for customers leaving rivals and signing up for one of its higher-data plans.
This may lure some customers. But they might not like what they find at Sprint. The carrier's network remains well behind those of rivals and won't catch up to them for at least another year, New Street says. It will be even longer before Sprint can claim network superiority as an advantage.
For Sprint investors, lower prices alone won't get it out of its current jam.