Sprint - Nextel 2010 Annual Report Download - page 5

Sales, Marketing and Customer Care
We focus the marketing and sales of wireless services on targeted groups of retail subscribers: individual consumers,
businesses and government subscribers.
We use a variety of sales channels to attract new subscribers of wireless services, including:
• direct sales representatives whose efforts are focused on marketing and selling wireless services primarily to
mid-sized to large businesses and government agencies;
• retail outlets owned and operated by us, that focus on sales to the consumer market as well as third-party
retailers;
• indirect sales agents that primarily consist of local and national non-affiliated dealers and independent
contractors that market and sell services to businesses and the consumer market, and are generally paid through
commissions; and
• subscriber-convenient channels, including web sales and telesales.
We market our postpaid services under the Sprint® and Nextel® brands. We offer these services on a contract basis
typically for one or two year periods, with services billed on a monthly basis according to the applicable pricing plan. We
market our prepaid services under the Boost Mobile®, Virgin Mobile®, Assurance Wireless™ and Common CentsSM brands, as a
means to provide value-driven prepaid service plans to particular markets. Our wholesale customers are resellers of our
wireless services rather than end-use subscribers and market their products using their brands.
Although we market our services using traditional print and television advertising, we also provide exposure to our
brand names and wireless services through various sponsorships, including the National Association for Stock Car Auto Racing
(NASCAR®). The goal of these marketing initiatives is to increase brand awareness and sales.
Our customer management organization works to improve our customer's experience, with the goal of retaining
subscribers of our wireless services. Customer service call centers, some of which are operated by us and some of which are
operated by unrelated parties subject to Sprint standards of operation, receive and resolve inquiries from subscribers and
proactively address subscriber needs.
Competition
We believe that the market for wireless services has been and will continue to be characterized by intense
competition on the basis of price, the types of services and devices offered and quality of service. We compete with a number of
wireless carriers, including three other national wireless companies: AT&T, Verizon Wireless and T-Mobile. Our primary
competitors offer voice, high-speed data, entertainment and location-based services and push-to-talk-type features that are
designed to compete with our products and services. Other competitors offer or have announced plans to introduce similar
services. AT&T and Verizon also offer competitive wireless services packaged with local and long distance voice, high-speed
Internet services and video. Our prepaid services compete with a number of carriers and resellers including Metro PCS
Communications, Inc., Leap Wireless International, Inc. and TracFone Wireless, which offer competitively-priced calling plans
that include unlimited local calling. Additionally, AT&T, T-Mobile and Verizon also offer competitive prepaid services and
wholesale service to resellers. Competition will increase to the extent that new firms enter the market as a result of the
introduction of other technologies such as Long Term Evolution (LTE), the availability of previously unavailable spectrum
bands, such as the 700 megahertz (MHz) spectrum band and potentially the introduction of new services using unlicensed
spectrum. Wholesale services and products also contribute to increased competition. In some instances, resellers that use our
network and offer like services compete against our offerings.
Most markets in which we operate have high rates of penetration for wireless services, thereby limiting the growth of
subscribers of wireless services. As the wireless market matures, it is becoming increasingly important to retain existing
subscribers in addition to attracting new subscribers. Wireless carriers are beginning to address growing non-traditional data
needs by working with original equipment manufacturers to develop connected devices such as remote monitoring, in-vehicle
devices and digital signage, which utilize wireless networks to increase customer and business mobility. In addition, we and our
competitors continue to offer more service plans that combine voice and data offerings, plans that allow users to add additional
mobile devices to their plans at attractive rates, plans with a higher number of bundled minutes included in the fixed monthly
charge for the plan, plans that offer the ability to share minutes among a group of related subscribers, or combinations of these
features. Consumers respond to these plans by migrating to those they deem most attractive. In addition, wireless carriers also
try to appeal to subscribers by offering devices at prices lower than their acquisition cost, and we may offer higher cost devices
at greater discounts than our competitors, with the expectation that the loss incurred on the device will be offset by future
service revenue. As a result, we and our competitors recognize immediate losses that will not be recovered until future periods
when service is provided. Our ability to effectively compete in the wireless business is dependent upon our ability to retain
existing and attract new subscribers in an increasingly competitive marketplace. See Item 1A, “Risk Factors—If we are not
able attract and retain wireless subscribers, our financial performance will be impaired.”
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