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Sprints New Prices Likely InsufficientSprints New Prices Likely Insufficient

Sprint’s price cuts probably aren’t enough in the short run to compete effectively with AT&T, Verizon and T-Mobile. But perhaps down the road.

Craig Galbraith

August 28, 2014

1 Min Read
Sprints New Prices Likely Insufficient

**Editor’s Note: Which is America’s top wireless network? Click here to see what we discovered.**

Sprint’s recently announced lower prices and larger data buckets might prove to be more of a challenge in the short term than followers of America’s third-largest wireless operator would like.

So says Greg Miller, analyst with Canaccord Genuity, who this week lowered his estimate for Sprint’s stock price to $5.75 per share. It was sitting at $5.69 on Thursday at 1:45 p.m. ET.

“We view the [pricing] decision as logical – if not belated – as lower prices should enable the company to better compete with the other three major national players; however, lower prices and higher customer acquisition costs will pressure both revenue and margins, in our view. Further, with the company’s network transition still behind that of its rivals, we remain skeptical that pricing more in line with peers will be sufficient to generate meaningful subscriber gross add share in the near-term.”

Miller previously was more bullish on Sprint, predicting its stock price would rise to $7.50, but he has backed way off of that. He reiterated his “hold” rating.

There’s little doubt that Sprint needed to do something to set itself apart in the market. Rival T-Mobile last year launched its “uncarrier” initiative that did away with postpaid contracts for new customers. And the battle against AT&T and Verizon has been an uphill one because those larger competitors have been much faster at upgrading their networks.

Follow senior online managing editor @Craig_Galbraith on Twitter.

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About the Author(s)

Craig Galbraith

Editorial Director, Channel Futures

Craig Galbraith is the editorial director for Channel Futures and Channel Partners, joining the team in 2008. Before that, he spent more than 11 years as an anchor, reporter and managing editor in television newsrooms in North Dakota and Washington state. Craig is a proud Husky, having graduated from the University of Washington. He makes his home in the Phoenix area.

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