Sprint CEO Hesse Says Recent Price Hikes Necessary, but Not Necessarily Popular
Sprint’s chief executive said on Tuesday that the company’s recent price hikes haven’t necessarily been a hit with customers, but maintained the move was essential for the company to continue offering fully unlimited service.
Back in January, the carrier added a $10 surcharge for nearly all smartphones. The company has also become more restrictive in its loyalty programs, lengthening the amount of time before which most customers are eligible for a fully-subsidized upgrade.
“Any time you increase prices you are not going to get a lot of high fives from the customer base,” Dan Hesse said, speaking at a J.P. Morgan technology conference in Boston. However, he said, the alternatives were things like data caps or throttling customers once they hit a certain usage level.
The company is just starting to see the profit benefit from the move, which is showing up in terms of higher revenue per user. The company should get a full quarter of that benefit in the second quarter. However, Hesse said that the company is also seeing greater competition this quarter as Verizon gets a full quarter with the iPhone and Thunderbolt and AT&T continues its $49 price promotion with the iPhone 3GS.
“It’s a very competitive environment out there,” Hesse said.
Hesse also pointed to a just-announced survey showing Sprint neck and neck with Verizon Wireless at the top of a key customer satisfaction index, with AT&T and T-Mobile seeing declining numbers. Hesse said putting up those high numbers are good, but added that the fact that people are surprised “tells me we’ve still got a lot of work to do on the brand.”
As for the company’s always complicated relationship with Clearwire, Hesse said that things have been improving and pointed to the companies’ recently renegotiated wholesale deal.
Hesse also said that while its rivals were quick to team up on a mobile payments effort, Sprint is still figuring out its best option.
“We’re still evaluating what we want to do in mobile payments,” he said. “It’s fairly complex.”