News Column

Sprint Cancels Framily, Rolls Out New Data Pricing Plan

August 19, 2014

By Mark Davis, The Kansas City Star

Sprint Corp. is killing its Framily discount plan and launching new pricing that tries to attract customers by doubling the data that rival carriers offer smartphone users.

New chief executive Marcelo Claure announced the shift Monday afternoon at an employee event capped by an Ice Bucket Challenge. More than a dozen top executives, including Claure, were doused in the fundraiser for the ALS Foundation.

"There's no longer going to be Framily as of this Friday," Claure said to employees, who met the news with a mixture of oohs and applause.

Framily was Sprint's effort to turn customers into recruiters -- wooing consumers with what some saw as odd TV commercials featuring a talking hamster as a father and other strange Framily members.

Subscribers with Framily accounts get bigger discounts by adding more customers to their own accounts. It largely didn't work, but Sprint will continue to honor the Framily discounts customers now have.

Employees cheered when Claure unveiled Sprint's new sales pitch, a shared data plan called Sprint Family Share Pack. It looks much like the shared data plans at larger rivals AT&T and Verizon but with a twist.

"We're going to double the high speed data at the same or lower price than AT&T or Verizon," Claure said.

Sprint's double-the-data theme applies to its new everyday pricing that mimic's the big carriers' plans and a new promotion that lines up in many ways with one now running at T-Mobile, though with more data and more lines.

Sprint's promotional plan allows up to 10 lines on an account for $100 a month and the lines all share 20 gigabytes of data. Each line also gets 2 gigabytes of data of its own.

T-Mobile's promotion provides 2.5 gigabytes of data for each of four lines, which totals 10 gigabytes, at $100 a month.

Data has become the battlegrounds for carriers, which generally allow unlimited phone call minutes and texts with their plans. Smartphones consume data when their owners stream video or music, download apps or perform other popular functions.

Both companies are running the promotions until the end of September. Customers' plans will revert to normal pricing plans at the start of 2016.

Markets have been waiting for Sprint to ignite a price war and Monday's announcement was it. Claure also made clear this was Sprint's first, but not last, move to win customers.

The Overland Park-based company did not address its unlimited data offerings, which have been available at additional cost for each device that gets unlimited data. A spokeswoman said to stay tuned on the unlimited front, that Monday's announcements addressed family plans.

Sprint's pricing plans Monday are aimed largely at luring customers away from other carriers. It also is offering to "pretty much reimburse" customers who switch from other carriers' plans and incur an early termination fee, Claure said.

The appeal to other carriers' customers is why Sprint intentionally shaped its new plans to look similar to the deals consumers see at other carriers.

Framily's downfall, the company concluded, was its odd-man-out structure made it difficult for consumers to compare it to what they already had or saw at other companies.

Sprint's new everyday pricing plan uses shared data for all the devices on a family's account, as do Verizon's and AT&T's shared plans. Sprint is giving customers twice as much data, or 20 gigabytes, to share.

Sprint was expected to make a price-cutting move because its data network lags that of its rivals. The company also had blamed recent customer losses on disruptions to phone calls caused by an extensive upgrade of its network equipment.

Network crews continue to add faster data speeds to the network but Claure held out the new pricing plan as a challenge to Sprint's sales staff.

"I want make sure from the sales people that we stop the excuses, that we stop blaming the network. We're giving you the tools to succeed," Claure said. "There's also no excuse why we shouldn't bring (to Sprint) every single customer that we see now."

Claure made his remarks just before he was doused with ice water along with more than a dozen other Sprint executives as part of the ALS Foundation's Ice Bucket Challenge. The foundation asks people to post videos of themselves being doused and for those who don't get doused to donate.

Claure was responding to a challenge from Tomer Kagan, the chief executive of a company called Quixey that makes an app for searching app stores for the kind of app you want.

Kagan had challenged Claure in this ice bucket video, in which he pledged to match the donations from others in the video.

Sprint had launched its Framily discount plan early this year. At four lines, the cost runs $160 with each line getting 1 gigabyte of data. You could buy unlimited data for an additional $20 per line.

Former CEO Dan Hesse had said the Framily plan was under review because it was no longer competitive with some changes at other carriers.

For example, T-Mobile's Simple Choice plan costs $100 a month for four lines and gives each of the lines 2.5 gigabytes of data on the company's faster data network.

Consumers have been barraged by Framily ads featuring the talking hamster dad, a girl with animated blue birds flitting around her head and other eclectic members of the discount group.

Sprint made it difficult to add existing customers to your Framily group, forcing customers to find non-Sprint subscribers to earn discounts. Sprint posted their Framily account numbers on eBay, Facebook and elsewhere to attract new members.

"It's quite the confusing plan to sign up and more confusing when people drop off," said Roger Entner, founder of Recon Analytics.

Entner said losing a Framily member ends the discount that his added line had brought to all the members on the account. And Sprint's network disruptions from the extensive upgrade effort had sent some customers packing.

"If Sprint doesn't work for them, your price goes up. So you get penalized for Sprint's network," Entner said.

To reach Mark Davis, call 816-234-4372 or send email to mdavis@kcstar.com. Follow him on Facebook and Twitter @mdkcstar.


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Source: (c)2014 The Kansas City Star (Kansas City, Mo.) Visit The Kansas City Star (Kansas City, Mo.) at www.kansascity.com Distributed by MCT Information Services


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