Sprint acknowledged Tuesday that its eye-popping promotion offering to cut AT&T and Verizon customers’ bills in half will save the average customer only about 20 percent.
That’s because Sprint is cutting in half the service portion of the bill — the part that pays for calling, texting and data. However, to get that savings, customers have to either lease a new phone or pay installments on the full cost of a new phone.
“They are still probably getting a 20 percent sort of net discount,” CFO Joe Euteneuer said at a Merrill Lynch conference on Tuesday. But, he added, many customers may find that Sprint’s existing rate plans are actually cheaper than the current promotion.
Euteneuer’s comments are part of the dance that cellphone executives do — touting huge savings to lure new customers, while reassuring investors that these promotions will not eat too deeply into profitability.
Under the latest offer, Sprint will also reimburse customers up to $350 per line in early-termination fees, but customers also have to turn in all the phones associated with their old account and get new Sprint models.
Sprint’s offer comes as new CEO Marcelo Claure is trying to position Sprint to gain core smartphone customers after several quarters of huge defections.
Asked why Sprint is not also offering to cut T-Mobile bills in half, Euteneuer responded with the company line that most of the potential switchers are at AT&T and Verizon, which are by far the two largest U.S. wireless carriers.
This article originally appeared on Recode.net.