In the next few months, 420,000 U.S. Cellular customers in the Midwest will find themselves without a mobile network. Sprint(s s) on Friday closed a $480 million deal with U.S. Cellular(s usm) that will hand all of the latter’s spectrum in Chicago, St. Louis and the surrounding regions into Sprint’s waiting arms.
This is no mere transfer of network title, though. Sprint plans to shut down U.S. Cellular’s network completely some time in those two metropolitan regions in the next several months (Champagne, Ill., and South Bend, Ind., will also be affected). And despite the fact that U.S. Cellular’s systems uses the same CDMA technology in the same PCS frequencies, Sprint isn’t supporting its existing handsets. All of those customers must either start over with new devices and new service plans on the Sprint network or go find a new mobile operator entirely.
Sprint Regional VP for the Midwest Kevin Gleason told GigaOM that Sprint planned to make the transition as easy as possible for U.S. Cellular’s customers by offering them plenty of incentive to move to Sprint.
“I believe our recapture rate will be high,” Gleason said. “We’ve already started communicating with them and several of them have already made the switch.”
Sprint has sent out an initial batch of letters notifying them about the transaction but Gleason said Sprint will soon follow up, detailing the timing of the network shutdown and the discount offers Sprint is making to draw those customers under the Sprint umbrella.
While Gleason wouldn’t give any specific details on the exact amount of the discounts, he said they would take many forms: device discounts over Sprint’s usual subsidies, trade-in fees for older phones, porting credits for making the switch and activation fee waivers.
Many customers will be able to get new phones and comparable service plans without having to pay a dime, he said. Many will also be able to upgrade to fancier devices such as the iPhone 5 or Samsung Galaxy S 4 for a much lower than price than other customers would pay, Gleason said. He added that switching customers would also have a great deal of flexibility in plan choices, since Sprint is extending the discount offers to its Boost Mobile and Virgin Mobile prepaid brands as well.
In general, Sprint and U.S. Cellular’s contract plans are comparable, and in the case of its unlimited data plans, Sprint is actually cheaper. But depending on the circumstances, not every customer will be getting an equitable deal.
For instance if you happen to have just bought a new high-end smartphone or tablet, Sprint incentive discounts won’t cover the full cost of replacing it. What’s worse is that brand new smartphone essentially become useless in a few months when the Chicago and St. Louis networks go dead (though it would work on U.S. Cellular’s other networks). Some customers may also balk at the idea of signing new two-year contracts if they want to take full advantage of the discount offers.
Gleason acknowledged that some customers will feel like they’re getting a raw deal, but he expects those cases will be kept to minimum. He pointed out that 60 percent of U.S. Cellular customers in affected cities have let their contracts lapse and the large majority of them use feature phones. Those subscribers are ripe for an upgrade, he said.
That’s one of the main reasons why Sprint opted for a wholesale replacement of U.S. Cellular’s networks and devices, rather than a gradual phase out like Sprint is doing with its Nextel iDEN network, Gleason said. So many of those U.S. Cellular devices are old or obsolete that it decided to start fresh with phones optimized for Sprint’s new Network Vision architecture, which boasts the most up-to-date CDMA and LTE technologies.
We’ll know more details about the sunset timeline and the specific discounts in the next couple of weeks. And if you’re a Chicagoan, you’re probably wondering what will happen to the name of U.S. Cellular Field, the home of the White Sox, now that the carrier is leaving the city. Well, it won’t become Sprint Field. Gleason said U.S. Cellular is keeping the naming the rights.
U.S. Cellular Field hoto courtesy of Shutterstock user Alan Mars