In this week’s episode of SmartWatch, sponsored by SanDisk, we take a look at the seismic shift happening in the wireless industry as carriers begin paying bounties and move away from subsidies. We also get a quick look at the Samsung Galaxy S5, and touch base with Boston Red Sox DH, David Ortiz. All this and more in this week’s edition of SmartWatch!
Read: U.S. Cellular Offers ETF Payoff
We checked in with Strategy Analytics’ Kevin Burden on the topic of the recent price war and some of the strategies carriers are using in the battle for customers.
“[Sprint] is a long ways off from meeting the type of network quality that AT&T and Verizon can promote,” he said. “What is an easier thing for them to do is get on the bandwagon of paying the ETF penalties for subscribers. It’s almost like they’re trying to stop the bleeding. They see their subscribers going over to T-Mobile. Is T-Mobile a better network than Sprint? No. What are they doing? They’re preying on users’ desire to save money. So, it’s an easier solution for them and a much better marketing message they can get out quickly.”
Read: Sprint Spark Phones Limited
But he also said that promotions are just that and carriers need to remember the fundamentals of keeping their businesses on track.
“It’s a dangerous game. If margins go down, particularly for an operator like Sprint or T-Mobile, that’s going to play heavily into their ability to keep their network competitive. In the long-term, it’s really about network coverage, network quality, customer service, etc… And that requires healthy margins for every single subscriber you have on the network.”