Following up on the leak of the internal documentation that confirmed the forthcoming launch of Sprint’s own branded prepaid service in Sprint As You Go set for later this month, Sprint representatives have confirmed that it will indeed be offered as a branded offering, but it will not be offered outside of corporate Sprint locations and confirming prior speculation, will not be subject to Sprint Prepaid Group throttling rules currently in place for Virgin Mobile and about to be implemented on Boost Mobile starting later this month.
This means that Sprint As You Go customers will be able to have unlimited monthly data access on the $70 smartphone plan, with the LTE-powered Samsung Victory being able to take advantage of the quickly growing LTE network for data access, while the other devices in the lineup will be able to take advantage of unlimited data identical to postpaid customers.
As for why the carrier decided to launch a direct Sprint-branded prepaid offering after years of avoiding such initiatives, Sprint spokesperson Jayne Wallace issued the following comment to Fierce Wireless:
“This is essentially a retail initiative for Sprint-branded stores only, created for customers who have an affinity for the Sprint brand and have indicated they want a no-contract option.” “As for our prepaid brands, this actually allows us to strengthen the focus on our primary prepaid sales channels.”
With Sprint shoring up its postpaid losses with prepaid customer gains in recent months, the fact that it is offering a directly branded prepaid option may be a result of the increasing difficulty of drawing more postpaid customers to the network as prepaid service becomes more compelling every quarter, with new options and new entrants competing for the growing segment of customers that don’t need or don’t want a standard postpaid agreement for service.
As Sprint previously relied on the Prepaid Group for the majority of its prepaid initiatives through Virgin Mobile and Boost Mobile, the about face may be more about realizing where most of its gains are coming from while it works to develop a better plan to grow its struggling postpaid side despite having the iPhone and improving its network with the Network Vision initiative.
As the SoftBank stake purchase is expected to be completed later this Spring, this latest move may be a way to increase its short-term financial position ahead of the completion of the deal, as the short-term gains should be enough to add to its balance sheet, provided there is a solid marketing effort for the offering, especially in markets with LTE service and directly compete against offerings from AT&T, Verizon and the transitioning MetroPCS.
Should the offering prove popular, it also has the potential of being expanded, both in terms of device selection and services, but it all hinges on Sprint’s execution of the roll out and marketing. If it misses on either of those fronts, it risks continuing its postpaid struggles well into the completion of the SoftBank and Clearwire purchases and it can’t do that when it has a prime opportunity to attract new and former customers that have always clamored for a prepaid service option directly from Sprint, especially with unlimited LTE access on prepaid, which has yet to be offered by either AT&T or Verizon.