Sprint makes big pitch to DirecTV users

NEW YORK – Sprint is offering DirecTV customers one free year of cellphone service in a bold move aimed at the satellite TV company’s new owner, AT&T.

AT&T, which bought DirecTV for $48.5 billion in July, has been promoting a bundle that knocks $10 a month off a combined bill for video and wireless phone service. For a single line, the value of Sprint’s promotion is about $50 a month. It’s Sprint’s way of offering DirecTV customers a bundle without actually owning a video company.

Sprint, which is in the midst of a turnaround effort, has been making a range of promotional offers to lure customers. But so far, the Overland Park, Kansas, company hasn’t been as successful as T-Mobile, which went through its own turnaround.

T-Mobile is now the No. 3 wireless carrier in the U.S. after surpassing Sprint this year. In the April-June quarter, Sprint lost 12,000 customers, while T-Mobile gained 760,000, in “postpaid” phone plans, the ones offered to customers with good credit. But Sprint says it’s been reducing the size of its quarterly losses in customers and even saw gains in the months of May, June and July.

Craig Moffett, a senior analyst at MoffettNathanson, said the latest promotion is bold, but reckless.

“Sprint is already losing money and is burning through its remaining cash at an incredible rate,” he said. “Offering free service for a year will only make a bad situation worse.”

The free service will cost Sprint $600 per line, plus any charges to pay off rivals’ contract-termination fees or to finish off payments under monthly installment plans.

Dallas-based AT&T Inc. has been using the DirecTV service as a way to package wireless access and entertainment. Sprint Corp., which doesn’t have the entertainment component, isn’t willing to cede those customers to AT&T.

The latest promotion shows how aggressive phone companies have become as they try to lure customers from each other, given that most Americans now have cellphones.

AT&T described Sprint’s offer as an act of desperation.

“This ranks right up there with a desperate Hail Mary pass to a petite defensive lineman,” the company said in a statement. “With Sprint’s network and the many asterisks on this deal, we’re feeling good about our offers.”