Sprint Adds Some Flexibility to Service Contracts

By Sinead Carew Reuters

NEW YORK (Reuters) -- Sprint Nextel Corp. (S.N) said on Tuesday it would let customers change rate plans over the first six months of a contract without having to sign a new one, as the No. 3 U.S. wireless service provider looks to attract new customers and keep existing ones.

U.S. wireless carriers typically make subscribers, who commit to one- or two-year contracts, start a new contract if they want to change rate plans, except during the first month when customers can typically end service without paying a fee.

Sprint, which aims to boost subscriber growth after several disappointing quarters, had previously allowed customers to change plans without a new contract in the first three months.

U.S. mobile service providers, struggling to add customers in a market where most people already own cell phones, tend to try to keep customers as long as possible by charging fees of as much as $200 if they leave a contract early.

Sprint said it was common for customers to want to change their plan before their contract expires.

Its latest move comes less than a fortnight before Sprint's biggest rival, AT&T Inc. (T.N), exclusively starts to sell the widely anticipated iPhone, Apple Inc.'s (AAPL.O) first cell phone which has a built-in music and video player.

Some analysts had said Sprint could have the most to lose if the iPhone is a success because its customers typically like advanced data services such as music and video.

AT&T said it "generally" lets users change service plans during a contract without signing a new one. Smaller rival Alltel Corp. offers a 15-day trial for a contract and said customers can change plans any time without extending it.

No. 2 U.S. mobile provider Verizon Wireless, a venture of Verizon Communications Inc. (VZ.N) and Vodafone Group Plc (VOD.L), asks customers to sign a new contract if they want to change service plans after a 30-day grace period.

Copyright 2007 Reuters

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