According to a report by the Wall Street Journal, Sprint is planning to also get rid of its two year contracts, and will fully transition to a structure that will have its subscribers mainly lease their handsets. If Sprint goes ahead with this plan, it will be joining other wireless carriers in eliminating standard wireless contracts, notably Verizon Wireless which announced earlier this month that it would no longer be offering contracts and phone subsidies, and of course T-Mobile, who ditched contracts more than a couple of years ago. To date, AT&T is the only major wireless carrier in the United States that still subsidizes new purchases of handsets.
Two year contracts used to be standard fare among wireless carriers. But it appears that times are changing. Service providers now mainly offer inexpensive monthly plans sans contracts, but only need subscribers to pay the entire cost of their handsets, usually in regular monthly installments staggered over a period of two years.
Last year, Sprint had started offering a lease option, and the carrier’s chief executive officer Marcelo Claure had stated that it was shifting to that model before this year ends. Essentially, this means that for mobile users, paying the full price or choosing to lease will be the only options available to them when buying a new device from Sprint. The carrier further claimed that more than half of its subscribers who acquired a new handset went for its lease option.
For years, Sprint used to the third biggest wireless carrier in the US, behind leaders Verizon Wireless and AT&T. But recently, the carrier saw its lead usurped by rival T-Mobile, who managed to surpass Sprint in terms of the number of active subscribers. T-Mobile now has 58.9 million connections, while Sprint is now playing catch up with 57.7 million connections.
As part of the new leasing direction that Sprint is taking, it also introduced just this week a new plan called iPhone Forever. It starts at $22 per month for an Apple iPhone, on top of the monthly service fee. Subscribers can choose to upgrade to the latest iPhone model every year as soon as it is launched in the market. Previously, Sprint had only allowed its subscribers to upgrade to a new iPhone device once every couple of years.
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