Sprint Corp has joined the ranks of other U.S. wireless telephone companies like T-Mobile US Inc and Verizon Communications Inc in scrapping away two-year contracts that used to be the industry standard. The company rolled out its new iPhone Forever leasing plan which allows customers to own an iPhone 6 for $22 a month over and above the typical monthly service fees.
The new plan also gives customers the chance to upgrade to the latest iPhone model at the end of the year when it becomes available. If they want to upgrade, they need to trade in their current device which must be in working condition. Sprint also gives clients the chance to purchase the unit directly if they want to keep it.
Customers can further slash down their monthly rate to $15 a month if they trade in their existing smartphones before December 31. Upgrades made after this date will bring the rate back to $22 a month.
Sprint introduced its lease option last year. However, compared to its latest iPhone Forever promotion which allows users to upgrade every year, the previous plan only allows customers to get a new iPhone every couple of years.
In an interview with The Wall Street Journal, Sprint Chief Executive Officer Marcelo Claure said that they will be following the leasing model completely by the end of 2015. This would mean that customers would only be able to get their smartphones from Sprint if they lease or pay for it in cash.
Two-year contracts used to be the standard in the U.S. wireless phone industry. Customers agree to be bound by these agreements in exchange for a lower phone price. The current trend, however, is for companies to provide inexpensive monthly plans minus the contract. However, clients are required to pay for the unit through monthly installments, usually lasting a couple of years.
The latest promotion is part of Sprint’s move to lure customers back. The intense competition in the wireless network industry as well as less than optimum network performance has resulted in customers leaving, CNET reported.
Sprint has fallen behind T-Mobile and now ranks fourth in the U.S. when it comes to the number of subscribers in its network. In the quarter ending June 30, its total connections reached 57.7 million, a little short of the 58.9 million total connections of rival T-Mobile, The WSJ reported.