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Holiday season, economics bring out pricing barbs: Carriers tout savings to sway customers

Top wireless providers have been busy little elves trying to sway customers with deals, savings promises and incentives during the holiday shopping season. The most recent holiday ad wars began when Sprint Nextel Corp. released new advertisements that promised customers could save anywhere from $240 and up annually by switching to its “Now” network.
The carrier is claiming by signing up for its Simply Everything plan, which runs $100 per month, customers can save $480 per year compared with Verizon Wireless’ unlimited premium plan at $140 per month. Sprint Nextel also claimed customers can save $540 per month compared with AT&T Mobility’s Nation Unlimited offerings, which cost $145 per month with unlimited text, data and AT&T Navigator are added.
The beleaguered carrier also made the case for its family-plan pricing, dubbed Everything Messaging Family, which costs $99 per month for two lines with 1,500 minutes. This was compared to Verizon Wireless’ and AT&T Mobility’s family plans, which both cost $120 per month for two lines with 1,400 anytime minutes. (All three carriers offer unlimited on-network calling as well as unlimited night and weekend calls, though Sprint Nextel’s plans start at 7 pm, while its larger rivals make consumer wait until 9 pm.)

Stirring the pot
Likely spurring some angry elves, it didn’t take long for competitors to counter Sprint Nextel’s claims. Shortly after the Sprint Nextel ads began running, T-Mobile USA Inc. said its 1,000 minute Family Time offering, which includes unlimited messaging, saves $120 annually compared to Sprint Nextel’s “Everything Messaging Family” plan. Verizon Wireless altered a few of its own plans, releasing a single-line promotion that includes unlimited navigation, unlimited mobile e-mail, unlimited mobile Web, unlimited messaging, unlimited mobile-to-mobile, unlimited nights and weekends and 450 anytime minutes for $80 per month.
Cellular South announced a similar claim during all this family-plan savings bandwagon, saying that customers who switched to its family plans would save anywhere from $120 to $240 per year compared to other leading wireless carriers.
In response to Sprint Nextel’s claims, Mark Siegel, AT&T Mobility spokesman, said that the carrier has not altered any of its plan pricing and places a greater emphasis on its high-end devices this time of year.
“Not everybody is interested in an unlimited plan,” Siegel said. “We think our plans suit our customers well.”
Verizon Wireless had a similar response, saying that its customers like to spend their money where they get the most value. The carrier cites its network as the value point when making a choice, said Verizon Wireless spokeswoman Brenda Raney.

Desperate times
Keith Mallinson, president of industry analyst firm WiseHarbor, said Sprint Nextel’s value claims don’t make it a stronger competitor.
“Sprint is still in a desperate position and has to make these sorts of moves to make up for its difficulties,” Mallinson said. “I wouldn’t regard it as a strategic strength.”
Overall, Mallinson doesn’t think the ads will have much of an impact on its competitors due to Sprint Nextel’s myriad of operating challenges.
“They’re hemorrhaging customers and the most important thing for them is to stem that loss,” Mallinson said. “Having a cheap deal is a good way of having people stick around, but they’re doing it because of the inferior position they’re in. It’s much better to be a market leader.”

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