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Wireless phone company Sprint PCS Group PCS.N on Friday introduced more competitive price plans in a bid to regain customers and encourage them to try its data service after posting its first-ever subscriber loss.

Analysts expressed concern that the new plans by the No. 4 U.S. wireless company will provoke another round of price cuts in a highly competitive industry suffering from slowing customer growth.

"This is going to be somewhat disruptive. It's going to exacerbate a price-per-minute war," said Patrick Comack, telecommunications analyst with Guzman & Co.

Still, shares of Sprint PCS rose 14 percent on the New York Stock Exchange, as it moved up with its parent Sprint Corp. FON.N , which posted a quarterly profit and improved its balance sheet. Sprint PCS was among the top percentage gainers.

"I would expect Sprint PCS to lead everyone down to those levels they're at right now," William Benton, wireless analyst with William Blair & Co., said.

"I don't think (its rivals) have a choice. They may wait to see what happens, but ultimately I think they always end up matching," said Benton.

ABOUT "MASS ADOPTION"

The company said the new calling plans for consumers will range from $30 to $150 with a one-year contract. Customers will be able to tailor the plans by adding features for a fee.

Consumers, for example, can sign up for unlimited data access on PCS Vision, Sprint's new high-speed data network, for $10 a month after a three-month free trial period. This is by far the lowest price in the industry for high-speed data.

"This is about mass adoption," Len Lauer, Sprint PCS president, told Reuters in a telephone interview, adding that he hoped the new plans will convince consumers to buy phones with features such as color screens and built-in cameras.

Lauer said Sprint PCS wanted to aggressively push for customers now and take advantage of having the widest geographic coverage in terms of high-speed data. He said the company planned to review its prices again in January.

U.S. wireless companies have been launching advanced wireless networks with high-speed Internet access over the past year in hopes that data usage will drive future revenue.

However, companies have struggled to develop a price plan attractive enough to draw customers who are reluctant to spend more money on wireless services amid the economic slowdown.

Michael Doherty, senior consultant with Ovum, said Sprint PCS's new plan was the kind of plan he had expected the company to introduce when it rolled out its new advanced network with high-speed Internet connections in August.

"This is what is going to change the marketplace. This is what's going to get people really talking about wireless Internet and get the discussion going," Doherty said.

So far, Sprint PCS said it has signed only 120,000 customers to its data-capable PCS Vision network, below analysts' expectations.

Lauer said data users tend to spend 35 percent more on their voice service and stay with the same provider longer than voice-only customers. "Our incremental cost to carry the data is very low," he added.

SUICIDAL MODEL

The new price plans are part of Sprint PCS's effort to turn itself around after posting a loss of 78,000 customers in the third quarter after its low-end Clear Pay service experienced problems with fraud and non-paying customers.

Analysts said the new price plans will likely help Sprint PCS add new customers in the fourth quarter and lower its customer turnover rate but they worried about the effect of the low rates on Sprint PCS' revenue and profitability.

"The price per minute has fallen 80 percent since the last George Bush was president and it just doesn't make sense to me," said Todd Bernier, wireless analyst with Morningstar. "It just supports my theory that the industry is following the same suicidal model that long-distance did."

Under the new pricing, Sprint PCS said it will offer features such as unlimited calling to and from other PCS phones for $5 a month. Plans at $85 or more will include unlimited data usage, unlimited PCS-to-PCS calling and a second line to share at no additional charge.

Sprint PCS eliminated the unpopular $3 customer-service fee previously charged when customers wanted to speak directly with a service agent instead of using automated options.

For business customers, plans will range from $85 to $150 starting Oct. 21 and include anytime minutes, unlimited data usage, unlimited PCS-to-PCS calling, ability to access corporate e-mail, voice command and free off-the-network roaming for up to half of anytime-minute usage.

Lauer told analysts in an earnings conference call on Thursday that sales to businesses were soft in the third quarter, representing only 12 percent of its total revenue instead of the typical 20 percent.

(Reuters)