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May 21, 2009

Sprint says that its Palm Pre customers will save about $1,431 with its Simply Everything package over the course of a two-year contract compared with other competing offers.

However, the question is, do the numbers make sense? Others are wondering if Sprint is telling the whole story...

Well, here’s a small breakdown of Sprint's math: the wireless operator offers its Everything Data Plan, which includes unlimited text messaging for $69.99 with 450 minutes or $89.99 for 900 minutes. If users decide to go with the Simply Everything Plan, they’ll get just that, simply everything for $99.99. That includes unlimited voice, texting and data.

While the Palm Pre and Apple's iPhone cost the same at $199, the unlimited plans offered by Sprint are in fact cheaper than those offered by rival AT&T. But the numbers don’t quite match the $1,431 in savings stated in the press release from Sprint that was published May 19.

Should wireless users decide to go to AT&T and get the iPhone, they’ll find the same tier of prices for voice, but on top of their voice service, they’ll have to spend $30 extra for unlimited data and $20 for unlimited texting. That puts the iPhone with unlimited data, texting and voice at $149.99 per month. Clearly not as good a deal as with the Palm Pre.

To summarize: unlimited everything with the Palm Pre on Sprint costs $99.99. Unlimited everything at A&T costs $149.99. Based on simple math, the Palm Pre with Simply Everything offers users $1,200 in savings over the course of a two-year contract when compared to the same unlimited plan at AT&T.

However, that’s still $230 short of what Sprint claims consumers can save. Some what's going on? Are we missing something here?

A spokeswoman for Sprint said that the wireless carrier added an additional $9.99 per month estimated on the fact that AT&T and Verizon Wireless don't include navigation with their other PDA and smartphone plans.

She said that while AT&T does include it with the iPhone, it isn't included with other PDA and smartphone plans. Sprint's Simply Everything includes turn-by-turn navigation, whatever that is.

Julien Blin, principal analyst and CEO at JBB Research, said that he doesn’t see any reason for AT&T or Verizon to adjust their price plans in the short term. “AT&T and Verizon don’t really have any reason to do so. The only mobile phone carrier that might do that is maybe T-Mobile because they’re known for their competitive prices. Then again, only time will tell.”

At the same time, Mark Siegel, executive director of media and analyst relations for AT&T Mobility, would not comment on recent reports that AT&T is looking to adjust the pricing on its data service plans.

But Siegel did point out one differentiating factor between AT&T’s GSM technology and Sprint’s CDMA that he thinks offers the iPhone superior value.

“Because of the technology that Sprint uses, you cannot do simultaneous voice and data. With AT&T’s GSM network, you can do that. If you receive a call on that CDMA network, however, while you’re in the middle of a data session, you’d have to drop the data session,” he said.

“The question with the Palm Pre is would users be willing to switch to Sprint Nextel given that they don’t have the best network and they haven’t yet proven themselves in customer care. I don’t know if the Pre is going to be enough, but I think they’ve done a good job with the device, so let’s wait and see,” Blin said.

It’s simply going to be about getting customers to believe in Sprint’s network and customer care. Time will tell how this will play out.

Meanwhile, there are many wireless industry observers that will be watching Sprint closely and measuring the amount of success it is getting from its efforts with the Plam Pre.

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    This article was featured on Business 5.0 and on Tech Blog.

Source: Sprint Wireless.