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TheStreet Open House

Sprint Answers Competition With Lowest 'Unlimited' Rates

NEW YORK (TheStreet) -- Sprint (S) announced its new $60 per month unlimited data plan in response to T-Mobile's (TMUS)  latest offer, as it seeks to stave off subscriber losses to the upstart T-Mobile.

The battle pits third-place cellular provider Sprint and its newly installed CEO Marcelo Claure against fourth place T-Mobile US and its outspoken leader, CEO John Legere. Legere has promises his company will overtake Sprint and move into third place by the end of the year.



Sprint's new offer is the least expensive in the industry at this point. Its new plan offers "unlimited talk, text and data while on America's Newest Network for $60 per month, a $20 savings compared to T-Mobile's $80 per month unlimited plan," according to the company. Sprint notes Verizon Wireless (VZ) and AT&T (T) don't offer unlimited plans.

Read More: Why Apple's iPhone 6 Won't Be Late

Shares of Sprint were down 0.63% to $5.53, while T-Mobile shares were off 0.58% to $28.99 in early morning trading in New York.

To qualify for the plan new customers must buy a new phone using Sprint Easy Pay plan and pay full price or bring their own compatible phone. Current Sprint subscribers can also take advantage of the new pricing if they meet the following requirements: they have a phone that was bought with Easy Pay, a phone no longer under contract or you're eligible for a phone upgrade or want to add another line to your monthly plan.

In a phone conversation earlier this week, analyst Jim Breen of William Blair & Company said he thought unlimited pricing plans will be attractive to a certain segment of the carrier's customer base but noted that many users use "2GB each month or less" and it's possible they might decide to stick with lower priced plan options.

Sprint makes it clear in a press release that it believes this new offer is a great deal. "Sprint's new everyday price of $60 a month for unlimited saves customers $480 over two years against T-Mobile's $80 everyday pricing. And, customers can save $120 over two years versus T-Mobile's promotional price...and they don't have to jump through T-Mobile's hoops and recruit their friends."

But, it's the small print at the very end of the release which must be noted. While Sprint talks about its constantly improving 3G, 4G/LTE and the currently under construction next-generation Spark network there is a footnote which adds a big asterisk to the true speed which will be available for the company's new unlimited offering: "To improve data experience for the majority of users, throughput may be limited, varied or reduced on the network."  So, in the short run, you might be getting all the data you can use but, at times, it may be slower than what you might get from the competition.

Earlier this week, Sprint announced reduced rates for its "Sprint Family Share Pack" with "four lines and 20 GB of data for $160 compared to 10GB of data for the same price from AT&T or Verizon." Sprint is also offering even more incentives to attract new multi-phone customers.

At the time T-Mobile CEO John Legere said, "It continues to amaze me to see the old carriers failing to listen to their customers-or reward them for their loyalty. That arrogance and indifference has defined the U.S. wireless industry for too long. We're changing all that."

Read More: 8 Stocks George Soros Is Buying in 2014

-- Written by Gary Krakow in New York.

To submit a news tip, send an email to tips@thestreet.com.

Gary Krakow is TheStreet's Senior Technology Correspondent.

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