Sprint Offers Student Promotion – Free Wireless Service for a Year – Consumers Urged to Read the Fine Print!
Sprint and Best Buy recently announced a new promotion targeting school-goers from elementary school through college. Their offering suggests free wireless service for one year (and up to two years if you refer a friend).
The face of the promotion seems like a great deal – however, the fine print and details of the program reveal that there really isn’t any value provided in this marketing gimmick. In fact, it could be more expensive in both the short and long-term.
The Sprint Student Promotion simply proves how far canny providers will go to twist their marketing of service packages in a way that offers no additional benefits over their current offerings in a desperate attempt for additional activations.
Sprint Student Promotion Details Summary
Sprint’s website gives a large number of questions and answers about the program. We’ll review the most important ones here.
Sprint & Best Buy Student Promotion Eligibility
- Eligibility is for students, including part-time, full-time or vocational; this applies to those enrolled in the US in elementary, middle school, high school, colleges and universities, or other accredited institutions.
- Students are required to verify their student status via valid report card, student ID, tuition receipts, and required state documents if home-schooled via fax of through Sprint’s student verify online form.
- It is only available through Best Buy stores through the wireless department.
Sprint & Best Buy Student Promotion Phone/ Plan Information
- Students must purchase a device at full retail price without subsidy. Students cannot bring their own device to take advantage of the promotion.
- Smartphone Purchase: 12-month service contract including unlimited talk, text and 1GB of data
- Basic Phone Purchase: 12-month service contract including unlimited talk and text – NO DATA.
- New & Existing Accounts: Promotion good for new accounts or existing accounts.
- Cancellation: Can cancel anytime, similar to prepaid MVNO services.
Taxes, Fees and Surcharges
It is best to consider that when going with Sprint or any of the other major post-paid carriers, standard fees and taxes apply in addition to the monthly service charge; conversely, standard MVNO pre-paid carriers, such as Simple Mobile, Page Plus, etc., already have these fees wrapped into the monthly advertised service charge.
- $36 activation fee per line.
- $2.50/line/month USF charge (up to 15.6% of plan value)
- $.40¢ Regulatory Charge/line/month
- $1-$2 911 Fee (Depending on state)/line/month.
|Plan||Regular Price||Activation||USF||Regulatory||911||Monthly Fees Avg||1 Year Fees Average|
|Talk/Text 1GB Data||$70||$36||$10.92||$0.40||$1.50||$15.82||$189.84|
|Talk/Text – No Data||$50||$36||$7.80||$0.40||$1.50||$12.70||$152.40|
*Chart is estimate based on program details and certain charges could vary by state, region and location.
- Please note: this charge DOES NOT include local/state taxes that could add additional charges.
Eligible Phones – College Students Have Discretionary Income?
Trying to find the deal in this promotion, I went to Best Buy’s website and tried to find MSRPs for basic phones. Only a few exist and were not easy to find. This leaves only a few choices for a “simple phone” without having to pay an insanely upfront full price for a smartphone. Best Buy and Sprint’s Student Program lists the models that qualify for program eligibility. Basically, one of these phones has to be purchased at full price from this list.
|Model||New Price||Open-Box Price|
|iPhone 5S 64GB||$899.99||$849.00|
|iPhone 5S 32GB||$799.99||$749.00|
|Samsung Galaxy Note 3||$749.99||N/A|
|Samsung Galaxy Note II||$699.99||N/A|
|iPhone 5S 16GB||$699.99||$649.00|
|iPhone 5C 32GB||$699.99||$649.00|
|Samsung Galaxy S4||$649.99||N/A|
|iPhone 5C 16GB||$599.99||$549.00|
|LG Optimus G||$599.99||N/A|
|HTC EVO 4G LTE||$599.99||N/A|
|Motorola Moto X||$599.99||N/A|
|Samsung Galaxy S III||$549.99||N/A|
|Samsung Galaxy S II||$549.99||N/A|
|iPhone 4S 8GB||$500.99||$450.00|
|Samsung Galaxy S 4 Mini||$449.99||N/A|
|Motorola Photon Q 4G LTE||$449.99||N/A|
|LG Nexus 5||$449.98||N/A|
|LG Viper 4G LTE*||$449.98||N/A|
|LG Rumor Reflex*||$329.99||N/A|
|Samsung Galaxy Victory*||$299.99||N/A|
|LG Rumor Reflex S*||$279.99||N/A|
* Denotes expected phone models valid for “simple phone” qualification.
Upfront Cost Doesn’t Make Any Sense for Student Targets
While elementary and middle school students might simply be happy to have a cell phone, most of this is targeting high school and college students who want to get a flagship model if at all possible for their social networking, games, texting, applications, etc. If they can’t get a flagship model, they’re surely savvy enough to know a good deal versus a bad deal when it comes to the cost of a basic phone. With eBay, Craigslist, and tons of other markets where working used cell phones are sitting around inactivated collecting dust, students are more than capable of seeing how inflated the MSRP of post-paid carriers are.
|Model||Phone Price||Activation||Monthly Fee||1 Year Total Cost||Upfront Cost|
|iPhone 4s 8GB*||$450||$36||$12.82||$639.84||$486.00|
|Galaxy S II||$549.99||$36||$12.82||$739.83||$585.99|
|Galaxy S III||$549.99||$36||$12.82||$739.83||$585.99|
|iPhone 5S 16GB *||$649.99||$36||$12.82||$839.83||$685.99|
|Galaxy Note II||$699.99||$36||$12.82||$889.83||$735.99|
|Galaxy Note 3||$749.99||$36||$12.82||$939.83||$785.99|
To get the cheapest basic phone, the upfront cost would be $285.99! (without taxes)
Does Sprint and Best Buy really think that college kids are going to buck up hundreds of dollars upfront to get a basic phone with only talk and text with no data? That’s the equivalent to 4 kegs, 24 cases of PBR beer, or a months worth of drinks at the bar. There is NO WAY students have this type of discretionary income to justify any savings that might be on the table.
Pictured above: eBay has the LG Rumor Reflex used from reputable sellers for under $80, and other listings are MUCH, MUCH cheaper. You’re only getting “free service” because you’re getting hosed with the requirement to buy a phone at MSRP. I think consumers would much prefer to pay “something” per month and have a broader selection of phones while avoiding a hefty bill to foot upfront.
What’s Best Buy and Sprint’s Catch?
Financing, Buy Back Program and Insurance is the name of the game for Best Buy
Post-paid has always been about getting the flagship model device and paying more each month (as well as getting more data and features, at a cost). Best Buy and Sprint’s Student Program is working backwards towards an MVNO prepaid, yet they are forcing customers to select from a handful of models while paying extremely high full price for a phone to qualify and pay everything UPFRONT. There has to be a marketing tactic and catch somewhere as this philosophy simply isn’t how the US consumers convert by choice.
Sprint and Best Buy has been pushing this model all over TV and the internet. The idea is that nobody will think about these costs and will hear “Free Service for Students” and sign up.
- In Store Only – The offer is good ONLY at Best Buy retail stores. Sprint or Best Buy will not make this offer available online. Their ploy is to simply get you in the store where a trained wireless professional can attempt to talk interested potential clients into other profit sectors of the business.
- Upfront Money – Most will show up not understanding that the requirement of purchasing a handset at full retail price, or will not realize the limited amount of models and how high they are to purchase outright.
- Financing – Best Buy is known to have a strong financing program.
A trained Best Buy wireless expert knows that potential customers will not have the cash to pay outright (or choose to purchase) one of the required handsets at full MSRP.
Best Buy employees will attempt to push their financing program to students who don’t have the cash and want a flagship model. A student alone or with authorization to add an existing line to their parents could get financing for a MSRP Samsung Galaxy Note 3 at $30/month for an $800 phone.
- Buy Back Program – Chances are, it’s not the potential customer’s first rodeo. They’re going to have another phone with some other service provider or have a phone of value in their possession. Best Buy will want to offer to buy that phone back in order to help offset some of the initial full price, or the out-the-door price. While Best Buy has been known to have fairly decent buy back value, it goes without question that you’re giving up some money in the process compared to selling on Craigslist or eBay for the convenience of getting the total transaction completed at the register.
- Insurance – Students are one of the largest segments of cell phone users; they also tend to drop or break their phones in a shorter period of time compared to many other segments of the market. You can bet that Best Buy’s wireless experts will push their insurance plan to every customer in their department. In fact, they’re required to do so!
Similar to their Buy Back Program, Best Buy is also known for having a fairly easy and reputable warranty coverage for electronic devices, including wireless phones.
After receiving financing and buy back credit, the student might feel warm and fuzzy enough to opt into this $5-$12/month charge when reminded how easily the phone might break throughout their four years in college.
Best Buy has the flexibility to offer financing, insurance and buy back credit that Sprint can’t compete with. Best Buy has done a good job implementing these three additional revenue sectors by keeping them in-house and internally run (for the most part) by themselves – not a third party.
Student Plan vs Sprint’s own Pre-Paid Service Offering:
|Carrier||Plan||Unlimited Talk/Text||Data||Cost Per Month||Fees/Month||Activation Fee|
* Denoted full purchase of a handset is needed at full MSRP or Best Buy financing approved.
Apples to Oranges Comparison from Sprint.com and Sprint & Best Buy Student Program
|BB / Sprint Student Program||Sprint.com|
|Phone Selection||Limited||Many Choices|
|Phone Price||Very High||Reasonable|
|Bring Your Own Phone||No||Yes|
Where the Program Might Benefit Some
After the first 12 months of service, “Free” turns into $50-$70. If you refer someone who also opts into the student program, you’ll get an additional 12 months of service for free. This is by far the only benefit to being suckered into paying upfront with out-of-pocket cash for this deal; in fact, getting someone else to sign up is the only way this deal can potentially be worth signing up for. By the time you add up free service for two years, it might not be such a bad deal OVERALL, but considering that you have to pay upfront, to me, I would never consider this a “deal.”
Data costs are only decreasing, and prepaid carriers are gaining ground with no-contract data offerings. Before the end of two years, these carriers will all be offering a promotion (if not a standard plan) that meets or beats Sprint’s Student Promotion plan today. It is impossible to justify two years of savings with the huge upfront cost (or financing).
Conclusion and Final Thought on Sprint’s Student Program
Kudos to Sprint and Best Buy’s marketing for coming up with a unique way to skin the cat – but don’t be a sucker for this marketing gimmick.
In actuality, it has little-to-no advantages over Sprint.com’s no-contract offerings. Post-paid fees and taxes are still due, unlike most other prepaid providers who include those fees and charges into the flat monthly rate. Preying on college students to extended financing for something that doesn’t offer any comparative advantage seems sleazy and is almost crossing into the 1998 Card Act (providing pizza and prizes to college kids in exchange for filing out credit card applications became “illegal”).
Post-paid carrier contracts will die out eventually and prepaid will dominate the market. Until then, count on clever marketing tactics and ensure that you’re looking at both the short and long-term cost (and value) of both handset and service “contracts.”
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