Sprint Corp (NYSE:S) is highly likely to hike the prices of its mobile plans due to the fact that competition has been slowing down.
The U.S carrier’s CEO Tarek Robbiati was addressing investors during a conference call held on Tuesday when he hinted that the company might hike its prices once again. Sprint increased its unlimited mobile plan prices from $50 to $60 per month in October. Price hikes are indicators that there has been significant slowdown in competition within the telecommunication industry especially as the holiday season kicks in.
“We have raised prices in the past few weeks. We did signal that may happen again. And we feel good about this,” stated Robbiati.
Raised prices for Sprint subscriptions especially in the fourth quarter is quite unusual. The holiday season is usually characterized by highly competitive offers as companies in the communications industry compete against each other for market dominance. However, the hiked prices could be the result of any number of factors such as the recently failed merger attempt with rival telecommunications company, T-Mobile Us Inc (NASDAQ:TMUS).
Jeffrey Moore, the founder of a research firm called Wave7 Research that is based in Lawrence pointed out that recent Black Friday deals were designed to analyze the competitive environment especially now that the Sprint and T-Mobile merger has been called off. Moore also noted in an email that the situation is quite a pleasing one for Sprint because less competition translates to fewer threats.
There have been major deals to customers from the four major carriers in the past years but this year has seen fewer deals or deals that are smaller compared to those offered in the past. Walt Piecyk, the Managing Director at BTIG LLC acknowledged that U.S wireless operators have been less generous this year and that the previously aggressive competition seems to be slowing down.
Meanwhile, less competition does not mean that Sprint will neglect its customers. In fact, the company is planning to erect thousands of new cell towers which means that the company will increase its spending. However, it is not clear whether the investment in more towers is part of the reasons behind the hiked prices.
Sprint stock closed Thursday’s trading session at $5.46.
