Sprint PCS Doesn't *Really* Want To Keep My Business

"RAF" <[email protected]> wrote in message
news:[email protected]...
> Bob Smith wrote:
>
> > RAF wrote...
> >> This assertion has been made by at least two posters in this thread.
> >> Out of curiosity, does anyone have any concrete evidence to support
> >> this claim? (I.e. $30/month does not qualify for a new phone rebate
> >> because of the unprofitability to Sprint PCS?)
> >
> > Here ya go ... http://pcshandsetupgrade.sprint.com/
>
> Huh?
>
> We know that SPCS requires a $35 minimum plan for rebates on handset
> upgrades. That's the reason for this discussion. Let me rephrase the
> question:
>
> What evidence do you have to support your assertion that $30 plans earn
> insufficient revenue for SPCS?

Lots of prior comments made by SPCS employees in this newsgroup, Verizon
employees in their newsgroup. No, I can't point you to a specific URL, but
there is a fixed expense for each customer, in the cost of coverage, account
management, sending out bills, and customer service. IOW, the cost of doing
business.

>
> >> Today, with all those sub-$35/month one-year contracts expired or
> >> expiring, I'm not so sure that Sprint's replacement phone rebate
> >> requirements are simply a matter of minimum profitability.
> >
> > It is ...
>
> Because ... ???

Because of all the prior comments made by the industry in the past 6 years,
the cellular employees who post here and the other newsgroups ... I do
remember someone from SPCS doing a press release (don't remember the date,
but it was 3 or more years ago), where they specifically talk about the cost
of subsidizing phones. It was mentioned that the carrier's cost of acquiring
phones was getting a bit less expensive, as the price of chips were costing
less, but that they were still subsidizing the phones quite a bit.

A few years back, one company rep in the GSM or alt.cellular group mentioned
in one post, the price difference for a customer on a Moto phone. The phone
sold by the service, which is locked and tied to the carrier cost the
cellular customer $200 less than the same model unlocked ...

Bob

Bob

---

› See More: Sprint PCS Doesn't *Really* Want To Keep My Business

In article <[email protected]>,
"Bob Smith" <[email protected]> writes:
>
> "Jim Seymour" <[email protected]> wrote in message
> news:[email protected]...
[snip]
>>
>> In my case, the equation is simple: A new phone, these days, costs a
>> minimum of about $150 (from a SPCS store, after rebate).
>
> Uhhh, no ... that's incorrect. In viewing
> http://www1.sprintpcs.com/explore/Ph.../AllPhones.jsp . With the
> mail in rebate, your final cost on a phone could be $0 to $30 for 3 models,
> 2 @ $50, with the rest of the phones, excluding the PDAs up to $150 to $200.

Okay. I was going by what was in the SPCS store I visited *and* what
I regarded as an acceptable phone. My fault for leaving those bits
out.

"Acceptable phone" is one that's received favourable comments
on-line, made by a manufacturer that historically receives mostly
positive comment, and where the store personnel recommend it based on
my criteria. IOW: Not any old phone that's cheap and looks pretty,
like I did last time. In this instance: That boiled-down to the
Sanyo RL7300.

So, I chose a phone and found that the only way I could get the
promotional price is to be locked-in to a contract that would raise
my rate. It has since been explained to me, and I have no reason
to doubt it, that, even then, SPCS would lose money on me. Fair
enough: SPCS and I can no longer do business.

>
>> You can
>> pretty-much bet that phone will last two years, at best. Even if you
>> don't abuse it.
>
> Oh, I don't know about that. Phones can last longer than 2 years.
[snip]

*shrug* Three phones in six years. And I take *very* good care of my
stuff. Yeah, they *can* last longer. Witness my wife's Nokia (I
think it is). Then again: She rarely uses it.

>
> Obviously, you don't want the expense of an additional $5 / mo, nor to sign
> an AA, so you've already made your mind up and that's OK.

More like $6/mo. after taxes and surcharges. So: $144 over 24
months. Discount on the phone was $150. After that (assuming the
phone lasted more than two years): I'd be losing money. So no: Not a
good deal for me. Actually, for my purposes, I would have been
better-off keeping my current plan and taking the $100 credit CR
offered me. Compared to taking the $150 rebate and going on contract
for another $6/mo., I would've broke-even at nine months and been
ahead afterward.

> Short sighted
> maybe, for that one time you need to use it, but that's just yours truly
> talking.

I understand your position. Please understand mine: I simply do not
need a wireless phone badly enough to justify a $550/year expense.

>
> Bob::My last reply to you in this thread::

Fair enough . I think this entire set of threads has about run its
course anyway.

--
Jim Seymour | PGP Public Key available at:
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Bob Smith wrote:

> RAF wrote...
>> What evidence do you have to support your assertion that $30 plans
>> earn insufficient revenue for SPCS?
>
> Lots of prior comments made by SPCS employees in this newsgroup,

I recall hearing from only (a very few) Customer Service and Tech
Support employees in this newsgroup, none of whom I would expect to have
access to the executive or marketing offices at Sprint PCS. Since you've
written with such conviction and seeming authority on these matters, I
thought perhaps you had some association with SPCS or the cellular
industry that surpasses simple hearsay. (Also, any info older than 2-3
years will have little relevance today. The industry changes too fast.)

> Verizon employees in their newsgroup.

I don't frequent any other alt.cellular.* groups, but I'm willing to
believe that all the wireless companies operate more or less the same
these days.

> No, I can't point you to a specific URL, but there is a fixed expense
> for each customer, in the cost of coverage, account management,
> sending out bills, and customer service. IOW, the cost of doing
> business.

Of course it costs money to do business. That's what phone subsidies and
upgrade rebates are all about: dollars and cents. The bean counters at
SPCS sit down and calculate how much they can afford to sacrifice with
such promotions in order to maximize revenues and market share.

However, I disagree with your view that lower-cost plans don't deserve a
"free lunch" just because they generate less income. I believe the vast
majority of SPCS customers have low-end plans ($30 or less in past
years). Not only are these customers profitable to SPCS, their numbers
alone guarantee a much greater revenue contribution than the minority of
customers with high-minute plans.

Simply put, it costs SPCS substantially less to offer rebates only to
the high-end minority. This saves them some face in light of the
preferential discounts offered to new customers (which is important
since SPCS no longer competes that well on plan price alone).

To return to the subject line of this thread: Does Sprint PCS *really*
want to keep the business of $30 customers? Of course they do, but
they'll risk losing some if it doesn't affect their bottom line. Just
let there be a mass desertion at the low end, and you'll see those
minimum upgrade requirements change in a hurry (IMHO).

In article <[email protected]>, [email protected] says...
> As I have posted before, I agree with the people who contend that at $30,
> they can't be making much money off you. I'm one of them. However, I think
> Sprint is missing a HUGE sales opportunity here. Require a more expensive
> plan but don't lock people into a contract. (I know, it is never going to
> happen.)
>

Actually, it *does* happen already. We entice you into contracts with
phone rebates, and 7PM N&W minutes, or PCS2PCS at no charge. But there
is always the option not to have a contract, and then you pay an
additional $10/month for that.

--
RØß
O/Siris
-+-
"A thing moderately good is not so good
as it ought to be. Moderation in temper
is always a virtue, but moderation in
principle is always a vice."

Thomas Paine, "The Rights of Man", 1792

In article <[email protected]>, raf12147@hotmail-
REMOVE.com says...
> What evidence do you have to support your assertion that $30 plans earn
> insufficient revenue for SPCS?
>

For an average customer, SPCS spends approximately $33/month just in
basic maintenance, activation costs, stuff like that. A customer who
calls in for support: more expensive. And so on.

This was all based off internal accounting and presented to us in new
hire training.

--
RØß
O/Siris
-+-
"A thing moderately good is not so good
as it ought to be. Moderation in temper
is always a virtue, but moderation in
principle is always a vice."

Thomas Paine, "The Rights of Man", 1792

"the option not to have a contract, and then you pay an additional
$10/month for that."
Yup... I pay $130 for unlimited minutes and $10 per month to drop at any
time.

O/Siris wrote:

> In article <[email protected]>, [email protected] says...
>
>>As I have posted before, I agree with the people who contend that at $30,
>>they can't be making much money off you. I'm one of them. However, I think
>>Sprint is missing a HUGE sales opportunity here. Require a more expensive
>>plan but don't lock people into a contract. (I know, it is never going to
>>happen.)
>>
>
>
> Actually, it *does* happen already. We entice you into contracts with
> phone rebates, and 7PM N&W minutes, or PCS2PCS at no charge. But there
> is always the option not to have a contract, and then you pay an
> additional $10/month for that.
>

In article <[email protected]>,
"RAF" <[email protected]> writes:
> Bob Smith wrote:
>
>> RAF wrote...
>>> What evidence do you have to support your assertion that $30 plans
>>> earn insufficient revenue for SPCS?
>>
>> Lots of prior comments made by SPCS employees in this newsgroup,
>
> I recall hearing from only (a very few) Customer Service and Tech
> Support employees in this newsgroup, none of whom I would expect to have
> access to the executive or marketing offices at Sprint PCS. Since you've
> written with such conviction and seeming authority on these matters, I
> thought perhaps you had some association with SPCS or the cellular
> industry that surpasses simple hearsay. (Also, any info older than 2-3
> years will have little relevance today. The industry changes too fast.)

Those were my thoughts, in reaction to both Bob's and Isaiah's
comments, as well. I decided to take their assertions at face value,
for two reasons: 1. I haven't the faintest bit of evidence on which
to base contrary assertions. 2. The information may be marginally
interesting but, in the final analysis, it doesn't really matter,
vis-a-vis my decision.

>
[snip]
>
> To return to the subject line of this thread: Does Sprint PCS *really*
> want to keep the business of $30 customers? Of course they do,

I don't think they do.

> but
> they'll risk losing some if it doesn't affect their bottom line. Just
> let there be a mass desertion at the low end, and you'll see those
> minimum upgrade requirements change in a hurry (IMHO).

Yes, but by then it'll be too late, won't it? Those people will have
other plans, with other carriers. Or, like I might, they'll have
decided they really didn't need a wireless service all that much,
after all.

Hopefully, for SPCS' future, the bean-counters running the show there
know what they're about. (Confidence is low. American bean-counter
style "management" seems most often to lead to mediocrity.)

--
Jim Seymour | PGP Public Key available at:
WARNING: The "From:" address | http://www.uk.pgp.net/pgpnet/pks-commands.html
is a spam trap. DON'T USE IT! |
Use: [email protected] | http://jimsun.LinxNet.com

"RAF" <[email protected]> wrote in message
news:[email protected]...
> Bob Smith wrote:
>
> > RAF wrote...
> >> What evidence do you have to support your assertion that $30 plans
> >> earn insufficient revenue for SPCS?
> >
> > Lots of prior comments made by SPCS employees in this newsgroup,
>
> I recall hearing from only (a very few) Customer Service and Tech
> Support employees in this newsgroup, none of whom I would expect to have
> access to the executive or marketing offices at Sprint PCS. Since you've
> written with such conviction and seeming authority on these matters, I
> thought perhaps you had some association with SPCS or the cellular
> industry that surpasses simple hearsay. (Also, any info older than 2-3
> years will have little relevance today. The industry changes too fast.)

I have no clue how long you've been lurking on this newsgroup. Your oldest
post under the ID of RAF is dated 6-13-04. I've been on this newsgroup since
late 98 ... and have seen more that enough comments on subsidies. I've read
the press releases from SPCS and the other wireless carriers when it's been
mentioned.

Sure the industry changes. Phones are cheaper now, yes ... but not as cheap
as you think.

>
> > Verizon employees in their newsgroup.
>
> I don't frequent any other alt.cellular.* groups, but I'm willing to
> believe that all the wireless companies operate more or less the same
> these days.

Yes they do ... They subsidize phones to all their subscribers.
>
> > No, I can't point you to a specific URL, but there is a fixed expense
> > for each customer, in the cost of coverage, account management,
> > sending out bills, and customer service. IOW, the cost of doing
> > business.
>
> Of course it costs money to do business. That's what phone subsidies and
> upgrade rebates are all about: dollars and cents. The bean counters at
> SPCS sit down and calculate how much they can afford to sacrifice with
> such promotions in order to maximize revenues and market share.
>
You just made my point.

> However, I disagree with your view that lower-cost plans don't deserve a
> "free lunch" just because they generate less income. I believe the vast
> majority of SPCS customers have low-end plans ($30 or less in past
> years). Not only are these customers profitable to SPCS, their numbers
> alone guarantee a much greater revenue contribution than the minority of
> customers with high-minute plans.

Ok, you've asked me for sources ... Now I'm asking you for some to back up
your opinions on why you think the majority of users are low end / low cost
users. SPCS reports in their latest 10Q that the average account brings in
$62 / month in revenue -
http://www.sprint.com/sprint/ir/fn/qe/2q04pres.pdf - Page 11. Just how does
your opinion fit with that number?

You want articles on phone susidies? Do a google search on - phone
subsidize "Sprint PCS" and just see how many articles, etc show up.

>
> Simply put, it costs SPCS substantially less to offer rebates only to
> the high-end minority. This saves them some face in light of the
> preferential discounts offered to new customers (which is important
> since SPCS no longer competes that well on plan price alone).

High-end minority? Time to back up your opinion one more time on this.
High-End would be those accounts that spend $100+ or more a month. Again,
the average account is paying $60+ a month.

> To return to the subject line of this thread: Does Sprint PCS *really*
> want to keep the business of $30 customers? Of course they do, but
> they'll risk losing some if it doesn't affect their bottom line. Just
> let there be a mass desertion at the low end, and you'll see those
> minimum upgrade requirements change in a hurry (IMHO).

I doubt it ... I'm betting that they will increase revenues on those low end
customers. Especially with this new F & F plan which encourages more talking
with better pricing when users go over the 300 AT minute threshold.

Bob

Jim Seymour wrote:

> Okay. Thanks for the info. *shrug* I can't justify the expense of
> the higher contract prices. I neither need nor want Vision. I
> neither need nor want many of the bells & whistles on these new
> feature-rich phones. I certainly cannot justify the expense of a new
> phone every two years.

If I may ask:

1. Why not just get a Nokia 3585? You can shell out $150 to buy it
without a contract, or sign up on a contract and get it for free. It
fits your requirements: no bells and whistles, just voice service and
nothing else.

2. Why not get the phone insurance? A replacement phone would have cost
you a $35 deductible, and you wouldn't be in this conundrum.


> Oh well - I guess wireless just isn't for me
> anymore.

*shrug* Guess not. I assume you've also looked into prepaid plans?



--
e-mail address fudged to thwart spammers.
Transpose the c's and a's in my address in order to reply.

"RAF" <[email protected]> wrote in message news:[email protected]...
> This assertion has been made by at least two posters in this thread. Out
> of curiosity, does anyone have any concrete evidence to support this
> claim? (I.e. $30/month does not qualify for a new phone rebate because
> of the unprofitability to Sprint PCS?)

Economics 101. Only SprintPCS knows where their break-even point is.
But it would behoove them to keep profitable customers, and to
discourage unprofitable customers from staying at the low-cost plans.
So, they've made it rather self-evident who they consider to be a
profitable customer worthy of retention by providing rebates only to
$35 (and higher) plans.

--

John Richards

"Bob Smith" <[email protected]> wrote in message news:[email protected]...
>
> Obviously, you don't want the expense of an additional $5 / mo, nor to sign
> an AA, so you've already made your mind up and that's OK. Short sighted
> maybe, for that one time you need to use it, but that's just yours truly
> talking.

That was my point too. Annual cost be danged. (It will look even worse
if you compute the cost over a lifetime, but what's the point...)
If I can afford the monthly cost in my budget and it provides a worthwhile
service, so be it.

--

John Richards

"Jim Seymour" <[email protected]> wrote in message news:[email protected]...
>
> More like $6/mo. after taxes and surcharges. So: $144 over 24
> months. Discount on the phone was $150. After that (assuming the
> phone lasted more than two years): I'd be losing money.

Not really, because at the end of that two years you'd immediately
qualify for another $150 rebate on a new phone. The average useful
life of a new phone is about two years, so, assuming that you'd replace
your phone every two years anyway, you're money ahead by paying the
extra $6 per month. This is what I meant by penny wise - pound foolish.
Don't look for the lowest monthly cost, look at the total cost over two
years.

--

John Richards

"RAF" <[email protected]> wrote in message news:[email protected]...
> To return to the subject line of this thread: Does Sprint PCS *really*
> want to keep the business of $30 customers? Of course they do, but
> they'll risk losing some if it doesn't affect their bottom line. Just
> let there be a mass desertion at the low end, and you'll see those
> minimum upgrade requirements change in a hurry (IMHO).

SPCS hopes to attract *new* customers with the $30 plan.
In marketing, that's known as a "loss leader." Eventually, the
expectation is that this customer will migrate to a higher rate
plan somewhere down the line. If the $30 plan was profitable
to SPCS, they'd want to retain that customer indefinitely by
offering them rebate incentives.

--

John Richards

In article <[email protected]>,
Isaiah Beard <[email protected]> writes:
[snip]
>
> If I may ask:
>
> 1. Why not just get a Nokia 3585? You can shell out $150 to buy it
> without a contract, or sign up on a contract and get it for free. It
> fits your requirements: no bells and whistles, just voice service and
> nothing else.

Thanks for the suggestion, Isaiah.

Actually, with the retention offer SPCS made, considerably less than
that. I searched the newsgroup on this phone, and it looked good.
Form-factor and feature-set are comparable to my Kyocera 2255. (Tho
no tip calculator .) People at the store say it has a good
"history" there.

I wonder why the sales person at the store didn't suggest that phone
in the first place?

>
> 2. Why not get the phone insurance? A replacement phone would have cost
> you a $35 deductible, and you wouldn't be in this conundrum.
[snip]

It all adds up, Isaiah. First it's another few bucks for this
feature, then only a few more for this other option, then a couple
more for this... "After all: It's only $4/mo." Before you know it,
you've gone from a $20/mo. plan with very limited minutes, the
original purpose of which was to have the phone for *emergency* or
otherwise-urgent needs, up to who-knows-how-much?

I'm sure "feature creep" is all part of The Plan .

Anyway, here's the up-shot:

. All evidence seems to be that, even at their listed "full"
price, US wireless providers are *still* subsidizing phones to
the tune of up to a couple-hundred-per, depending on the
model. (Thus the so-called "subsidy lock"s.)

. Sprint PCS' average per-customer cost is about $33/mo.

Between my mistaken assumptions about SPCS' business model, a lack of
salesmanship during one store visit, and lack of research on my part,
I nearly became an ex-SPCS customer. Thanks to the education
so-patiently given me here, Isaiah's last suggestion, SPCS' customer
service people and a *terrific* store manager, I'm staying.

During this: I found out that not only have SPCS' long-distance rates
to Europe become more sane, they're actually *lower* than our
land-line Sprint long-distance rates! So now my wife and I are
crunching the numbers with an eye toward going to a combined plan on
SPCS and dumping one of the land-lines.

I'd like to thank everybody that participated in this thread for
their contribution. I sincerely appreciated the information and
advice. I especially appreciated the non-inflammatory way in which
it was presented. One of the more civilized newsgroups in which
I've participated.

--
Jim Seymour | PGP Public Key available at:
WARNING: The "From:" address | http://www.uk.pgp.net/pgpnet/pks-commands.html
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Use: [email protected] | http://jimsun.LinxNet.com

"Jim Seymour" <[email protected]> wrote in message =
news:[email protected]...
>=20
>=20
>=20
> I'd like to thank everybody that participated in this thread for
> their contribution. I sincerely appreciated the information and
> advice. I especially appreciated the non-inflammatory way in which
> it was presented. One of the more civilized newsgroups in which
> I've participated.
>=20
> --=20
> Jim Seymour

Thanks for that feedback to the newsgroup, Jim.
During a portion of this thread, I worried you were closing your mind,
and in danger of becoming another anti-Sprint voice.
I'm glad I was wrong about that.
Your help in keeping some "civilization" in this group will be welcome.
---JRC---