After announcing a promotion Tuesday that would cut the bills of AT&T's and Verizon's customers in half if they switch to Sprint, the wireless carrier admitted that the net savings is only closer to 20 percent rather than the 50 percent that it is marketing. When customers on the two larger rival carriers switch, they would still have to pay for a new phone or lease one, costs that are not calculated in the promotion.
As Ina Fried from Re/Code reported:
"They are still probably getting a 20 percent sort of net discount," CFO Joe Euteneuer said at a Merrill Lynch conference on Tuesday. But, he added, many customers may find that Sprint's existing rate plans are actually cheaper than the current promotion.
The deal does not apply to T-Mobile customers:
Asked why Sprint is not also offering to cut T-Mobile bills in half, Euteneuer responded with the company line that most of the potential switchers are at AT&T and Verizon, which are by far the two largest U.S. wireless carriers.