Feature Article

September 16, 2014

T-Mobile CEO Says Sprint's 'iPhone for Life' Plan May Disappoint Customers

With the iPhone 6 and 6 Plus arriving later this week, Sprint's “iPhone for Life” plan is the cheapest across the four major U.S. wireless carrier providers, according to a study by RBC Capital Markets.

Last week Sprint introduced its iPhone for Life plan, which allows customers to pay only $20 per month for 24 months for a 16GB iPhone 6 model, and $25 per month for the 16GB Plus.  The plan calls for no out of pocket costs and guarantees a new device every two years.  At the end of two years, Sprint customers can upgrade or purchase their leased iPhone.

Seeing a lucrative opportunity to get a bigger slice of the Apple pie, Sprint's closest competitor T-Mobile USA announced that the two new 16GB iPhone 6 and 6 Plus devices on their network will be available for 24 monthly installments of $27.08 and $31.24, respectively. 

Assuming a couple gigabytes of data on a single line plan for two years, Sprint's iPhone for Life pricing will cost a customer $1,680, narrowly beating out the $1,730 price tag on T-Mobile.

Sprint's new CEO Marcelo Claure hopes the new pricing plan will have Apple fans flocking to their network and away from rivals T-Mobile, AT&T and Verizon.

“We think this is going to be one of the most successful launches, so therefore we decided that it requires a different rate plan”, said Claure. “We're launching unlimited data, voice and text for $50 only for iPhone 6," he added.

Even T-Mobile's boisterous CEO John Legere had to applaud Sprint's aggressive pricing move.

“You have to give [Claure] credit for what he is doing, he is moving, he is swinging his bat,” said Legere.

But in a recent interview with CNET's Roger Cheng, Legere warned that Sprint's aggressive pricing may end up hurting the company if customers show up and get a poor experience.

“When your network isn't up to par, you have to compete on price,” said Legere. “If you could, you would do that later. If customers come in because of price and see that Sprint's network is not right, they're going to leave”.

Sprint ranked last of the top four wireless carriers in a study of network performance released in August 2014 by RootMetrics, and remains far behind Verizon and AT&T in network upgrades. 

Claure said that it could be another year before Sprint's coverage density is high enough to start advertising it as the best.

Edited by Maurice Nagle

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