Sprint Corp (NYSE:S) Takes A Hit From New Ad From Verizon Communications Inc. (NYSE:VZ) Warning Against Cut-Rate Networks

Sprint Corp (NYSE:S) Takes A Hit From New Ad From Verizon Communications Inc. (NYSE:VZ) Warning Against Cut-Rate Networks

Verizon Communications Inc. (NYSE:VZ) has created a new ad featuring Jamie Foxx demonstrating a chart of its network coverage in the US.

The ad also showcases another chart of Sprint Corp (NYSE:S)’s network coverage which is not as comprehensive as the competitor. The Hollywood superstar then tells users not to be fooled by cut-rate networks. The ad seems to be a direct retaliation against Sprint for the ad featuring Verizon’s former pitch guy. The ad was simply designed to put across a clear message that Verizon has more LTE coverage than its competitors.

The ad also undercuts Sprint’s claim that all carriers are great and that the reliability from the two firms is within 1% of each other. Verizon clearly did not like that comparison so it hired Jamie Foxx to clear out the air. This is also not the first time that Verizon has attacked its rivals. This time, Sprint was targeted through Verizon’s ad campaigns and the recent ad described the competitor as a ‘cut-rate network.” While it appears as a serious jab towards sprint, Mr. Foxx adds a bit of humor to the commercial making it seem more neutral. The ad was aired during the NBA finals.

Foxx also highlighted that Sprint is ranked last in LTE coverage and its 4G coverage is roughly a quarter of Verizon’s LTE coverage. The telecommunications companies in the US have been dishing out such controversial ads highlighting increasing competition among them though the mobile industry has recently been experiencing slow growth. The four major carriers including T-Mobile US Inc (NASDAQ:TMUS) and AT&T Inc. (NYSE:T) have been competing for a dormant pool of customers.

This year Verizon has doubled the number of active monthly users by more than the number of active subscribers that Sprint registered. The second quarter in 2016 was particularly tough for the mobile service providers. Only T-Mobile managed to record positive growth in its wireless services. the rest of the firms recorded declining revenues.