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Summary:

Sprint isn’t just losing millions of customers and billions of dollars, it’s in the midst of pioneering a new management philosophy. We’ll call it the Three-Megabit Monte. Similar to the venerable street con, this is where Sprint leads a customer down a confusing line of lies […]

Sprint isn’t just losing millions of customers and billions of dollars, it’s in the midst of pioneering a new management philosophy. We’ll call it the Three-Megabit Monte. Similar to the venerable street con, this is where Sprint leads a customer down a confusing line of lies and inflated charges in the hopes of making a buck.

As detailed by Allen Harkleroad (who is one wrathful Southerner) on his web site, Sprint has been charging him almost four times the price of the amount it pays the local telephone company for two T-1 access lines. That’s about a 75 percent gross margin. But what really drove Harkleroad around the bend was being lied to by a Sprint salesman, who claimed that the company was charged $1,998 for the T-1s (the phone company, on the other hand, said it charges some $500). Harkleroad has since switched providers and pays about $1,500 less per month.

But he’s not done with Sprint yet. He figures the company owes him about $56,000 (for charging him so much), and he wants to get paid. Harkleroad also wants to encourage the rest of Sprint’s customer base on the access side to take a close look at their bills. And the icing on this cake? He alleges that Sprint charged him for providing 3 mbps download speed, but only provided 2.5 mbps, saying that the difference was lost to overhead. And that’s where the the Three-Megabit Monte philosophy gets it name.

For more examples of Sprint’s philosophy in action, check out this story, this story and this one.

  1. You guys are unfairly singling out Sprint. Virtually every RBOC does this too.

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  2. Although I’m sympathetic to the salesman lying about the true bandwidth throughput (and think it was unethical), why would you believe any salesperson when it comes to competitive info (i.e. pricing)? Can’t blame anyone for not doing your homework.

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  3. This guy is not including framing and other overhead. Don’t know about the pricing, but being that he is presumably an adult, the person should be doing his own due diligence BEFORE signing a contract. This is not the level of reporting I am expecting from gigaom unfortunately, seems rather more Weekly World News than anything else.

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  4. Stacey Higginbotham Monday, May 19, 2008

    I agree that he should have called around earlier on pricing and he admitted as much to me as well. I don’t think he should get his money back, but I do think such market-insensitive pricing and outright lying are part of Sprint’s woes, which is why I wrote this up.

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  5. Let’s face it, Sprint’s service sucks. On the wireless side, it just took me over 2 hours and 6 different phone reps to get my EVDO card activated. I finally just went in to a store to get someone to activate my account. They did it in about 15 minutes.

    The SprintNextel web site is poorly designed. It’s difficult to set up an online account if you only have an EVDO card, since they always want to text you a pin number. That’s doesn’t work when you don’t have a their cell phone.

    Just once it would be nice to call in and get my problem resolved the first time by the first person who answers the phone.

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  6. He sent this story to us too, but if you look into, it’s not nearly as bad as he makes it out to be. In fact, it’s not that bad at all. Basically, they offered him a price and he took it. He didn’t check competitive pricing before signing a deal, and is complaining after-the-fact about how Sprint “owes” him money for his own failure to find out what the market rates were.

    And, he confuses wholesale pricing with retail pricing, when there’s always some form of markup. Does he complain about the supermarket charging him $5 for a tub of ice cream when they pay the manufacturer $2.50? Does he demand $2.50 back?

    I just don’t see how this is a story. Man makes bad purchase, discovers it’s a bad purchase. That’s not the company’s fault. It’s his own fault.

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  7. Hi Mike, the point is the Sprint sales reps consistently lied to me and advised me that if I renewed a contract the cost would actually be more than what I was paying currently (2411.00). That’s dishonest and gouging. Ask yourself if you found out someone lied to you that was costing you roughly 1400 to 1500 a month, how would you feel about it. Try wearing my shoes for a bit. I still love TechDirt ;-)

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  8. Stacey Higginbotham Monday, May 19, 2008

    @Mike, I agree that he made a bad purchase, but any company so out of line on pricing is in a dangerous position when its customers start realizing they can get a better deal elsewhere. Harkleroad may accelerate that process for Sprint, which is worth noting.

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  9. to me, the big news in this story is that sprint provides t1 service at all. i assumed sprint stopped selling those services w/the embarq spinoff, but i guess they just stopped owning the pipe but continue to re-sell the service.

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  10. This is a dumb reason to jump on sprint.
    The guy is a moron for paying that much, you can’t blame sprint for taking his money.

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