It's not a bad marketing scheme for Lafayette—all Sprint customers, not only new users, get a 10% cut in their Sprint bill if they are LUS customers. Business customers also get waived activation fees for their employees, discounts on upgrades, and a 20% discount on accessories if bought at the time of activation. Over the course of a year a 10% discount can add up...the average US cellular bill seems to be about 600 dollars a year. While the regular joe residential figure, is nice (and I know one guy who just cracked his phones casing who says he's planning to take advantage of it when he gets his new iPhone 4s) it probably isn't where LUS sees its greatest upside. The dollar figure for businesses can add up rapidly—and LUS has been having already been having unplanned-for success in the business sector. Back in August G4S started "to provide network deployment and customer fulfillment services" For LUS Fiber. The company is focused on the business market and this sort of deal can get a foot in the door at businesses. It's easy enough to imagine the sales pitch that would feature going with a superior local network and getting a nice break on your nation-wide cell service.
In the longer run the payoff is likely two-fold. First partnering up with Sprint opens up a dialog with a company that, among other things, both provides long-haul fiber but needs local backhaul. Lafayette is ideally situated to provide local backhaul but needs long-haul connections. There's a nice symmetry there that growing a little trust could help develop. And then there are those other possibilities...
The second long-term consideration, the defensive move, however, is really nice. Cox, we all know, is eventually coming with its relabled Sprint service—it's already launched that addition to its triple play in markets across the country. At one point Cox was geared up to launch its own independent network using (expensive) spectrum it bought at Federal auction that would be synched tightly to its cable offerings and form a basis for a Cox "third screen" strategy. That's fallen through and a much less ambitious plan to resell Sprint service is what now being offered in limited areas. When Cox gets to Lafayette with that service they'll not have a clear field where they are offering something that the local competition can't match. LUS can, correctly, say that they are getting you a deal on the full range of Sprint services and all the nifty new devices Sprint has in its portfolio while Cox is offering some white-label subset of the the full Sprint network.
Not a bad move.
Update, 10:30, 10/18/11
The Advertiser, the Advocate and KATC have stories this morning on yesterday's Sprint-LUS Fiber announcement. KATC reports that Sprint credits the unique deal to the community's FTTH project:
According to Lori-Anne Hill, Director-Federal & Public Sector Sales for Sprint, this relationship is the first of its kind for Sprint -- partnering with a utility to offer wireless services at a discount. Sprint's decision to partner with LUS Fiber stems largely from the city of Lafayette's impressive Fiber-To-The-Home-and-Business infrastructure and the city's foresight to bring that technology to the city.If you only have time for one I'd recommend the Advertiser version. The reporter apparently spent some time talking to LUS' Terry Huval and some bits of the history leading up to the agreement—including the information that Sprint approached LUS Fiber with the deal and is taken with the gumption implied by building our building our own fiber network. Companies like Sprint, who are laboring to extend their own fiber-optic backbone, understand the start-up expense involved and the long-range vision that implies. That story concludes with a tantalizing hint of future benefits:
This pact with LUS Fiber also extends Sprint's reach directly to LUS Fiber's valued customers and it opens the door to other mutually beneficial business opportunities for Sprint and LUS."
Huval agreed, saying that LUS Fiber and Sprint already are talking about other possible ways to benefit customers of both services.
"We have some ideas, but nothing we can state publicly right now," he said. "But this does give us a platform to move forward in the future."