Sprint's New Phones May Not Be Enough

Helen is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Sprint Nextel (NYSE: S) is somewhat behind when it comes to the speed of cell phone technology, and it's about time, as far as I'm concerned, that it caught up with its competitors.

Sprint's rivals are releasing their own "4G service ... using Long Term Evolution, or LTE, technology". This means that Sprint will need to catch up to keep in the race for the loyalty of its own hometown. Rising to the challenge, Sprint has decided to launch its own similar technology later this year. However, what stockholders need to worry about is whether or not this move it too little too late, and if the damage is already done. The projected improvements that the upgrade will have on Sprint's service are fairly impressive, however, so perhaps the company will be able to stay ahead of the game after all.

There is one very important thing in Sprint's favor: it is the most highly rated company in terms of customer satisfaction across all 47 relevant industries. It has also held this choice place for a period of four years, indicating that this is perhaps one of the better long-term options to keep an eye on. The reason I say this is that it also won first place for the company that has shown the most improvement in customer satisfaction, a trend which I expect will continue for a long while yet to come. In fact, over the last four years, Sprint has successfully moved from last place to first place in this regard. In addition it is the company that has shown the largest increase in customer loyalty.

As a stockholder you'd prefer to back a company to which consumers cling. Something that a lot of customers see as extremely important is the quality of their call center experience, especially with companies that deal in phones and wireless technology. Sprint is number one in terms of the satisfaction received by customers when dealing with the company's call centers. This level of customer care is something that other companies in the industry could learn form. In a lot of cases your image is what sets you apart from your competition.

Sprint is also not without its innovations. Recently, it found a way to make it easier for individuals with speech difficulties to initiate calls on a wireless phone. Basically, how the system works is that the individuals in question will merely have to dial a short code. This will put them in touch with an operator who will then assist them in making the call that they wish to make. The operator gives assistance by repeating what the person with the speech disability says to the person on the other side of the line. This enhances the accuracy of the communication and offers people with such disabilities a way to participate in phone conversations. No special equipment is needed. Again, this is something that is very good for Sprint's image, another way in which the company keeps the loyalty of its followers.

Sprint competitors Verizon (NYSE: VZ) and AT&T (NYSE: T) are keeping close tabs on each other as each of these two great companies edges closer and closer to releasing shared-data pricing plans. Whichever one of the two companies gets there first could make a huge impact on the way that we see technology, wireless technology in particular. The basic idea behind these plans is that they will make it more economic and efficient for people to gain internet access across multiple devices. Consumers will be able to buy a "bucket" of data that will then be neatly split across a variety of devices such as iPads and computers. As people become more and more used to the fact that this is a faster and more efficient method of accessing the internet, they will also begin to buy bigger and bigger "buckets" of data to use across the various devices that they own. Verizon in particular has noted that this will change the way that success is measured and plans to move from a per user measuring system to a per account system. Sprint is simply not a real player in this regard, although it is noted that it "won't be far behind".

AT&T has suffered some bad news lately when it was named as one of 48 carriers that are vulnerable to hijacking. Basically a hacker can hijack your internet connection if you have a smartphone and essentially take over your activities. This poses a lot of threats for those people who have smartphones as they are therefore vulnerable. This is a problem made possible, ironically, by the type of firewall that these carriers use and that hackers have since learned how to manipulate to their advantage. With AT&T looking to make a major play in shared data plans, it needs to ensure the trust of its users.

Of course, the big news right now in the industry may be the Google (NASDAQ: GOOG) takeover of Motorola Mobility. Google has now secured itself a phone maker, and one that has had success in the industry, though it's been a little while now. Motorola has been selling phones mostly with AT&T and Verizon sets, but Sprint may be a target now that it has more money and more backing at its disposal.

Sprint will soon be in the mix of new competition in selling the new Samsung Galaxy S III Android phone. The phone will be sold by the four major US retailers AT&T, Verizon, T-Mobile USA, and Sprint. The phone uses Qualcomm's (QCOM) chips and is expected to be a big player in the market. With everyone selling the phone, it won't be a big mover for any of the competitors, but it might give Sprint a chance to advertise its new speedy phones with an exciting new release.

It's my opinion that Sprint's move toward faster phones may be too late. AT&T and Verizon are already on the next step with shared data plans. Sprint must catch up in a hurry, or risk being left behind on another industry innovation. Hopefully, Sprint's new products will catapult the company back into the mix and fast.


QueenBC has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.

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