In its attempt to revive Sprint Corporation (NYSE:S), Masayoshi Son, Chairman of Sprint, has introduced some exciting low-cost plans for the customers. The latest plan from Sprint will allow customers to avail 20 gigabytes of data with a maximum of 10 lines for a cost of $100. This is another step in the price cutting strategy followed by Sprint Corporation (NYSE:S) for attracting more customers.
According to the new CEO of Sprint Corporation (NYSE:S), Marcelo Claure, “The message is simple: We are back in the game. We are going to offer most competitive value for American consumers.” The announcement has clearly signaled the upcoming strategy of the company and the new plan is in accordance with Claure’s prior week announcement of cost cutting to be his priority.
According to the experts, this price cutting strategy is a move inspired from Verizon Communications Inc. (NYSE:VZ) price slashing for its text and data plan along with T-Mobile US Inc (NYSE:TMUS) expanding its family plan for 6 lines. T-Mobile has indicated some price cuts in the upcoming months.
However, the experts are concerned about the stressing profit margins and subsequent dividends because of these price cuts. The price cut spree started after T-Mobile US Inc (NYSE:TMUS)’s move to slash plan prices last year and it affected the complete U.S. telecom industry with a string of price cuts from all the major carriers.
Sprint Corporation (NYSE:S) is one of the four biggest US Telecom carriers offering wireless and wire-line services to its consumers, government users, and businesses within the U.S., Puerto Rico, and the U.S. Virgin Islands. The company has a market cap of $22.17 billion with current EPS of -0.73. The company reported net income of $23 million with adjusted EBITDA of $1.83 billion for the quarter.
This article has been written by Prakash Pandey and edited by Serkan Unal.