Sprint Nextel Corp. isn’t apologizing for its decision to ax customers it determined were calling customer service too often.
The No. 3 U.S. wireless provider with 53 million customers, which recently launched an advertising campaign to attract new customers, is disconnecting more than 1,000 subscribers for calling its customer service lines too often and making what the company called unreasonable requests.
“These accounts have been researched very carefully,” Sprint spokeswoman Roni Singleton said. “We feel strongly that the decisions we made, we stand by them. These decisions weren’t made lightly.”
The company said on Monday it started sending service termination letters on June 25 to 1,000 to 1,200 customers who had called the company about 40,000 times a month in total.
In debate on the Internet, Sprint’s move has attracted criticism that the company is penalizing consumers for trying to get what they paid for, or that the frequent calls are more a reflection of poor customer service by Sprint itself.
“Companies like Sprint sometimes do have to take a hard line, and that may mean canceling certain customers,” said Chris Denove of JD Power and Associates, a customer satisfaction survey firm. “But what I would caution Sprint is to look at the problems that caused these customers to call over and over again,” Devone told CNBC.
Sprint insists that the problem is not with its customer service in response to CNBC’s inquiry. Instead, it says, getting rid of the high maintenance customers will help it improve service quality.
"These customers were calling to a degree that we felt was excessive," said Singleton.
"In some cases they were calling customer care hundreds of times a month for a period of six to 12 months on the same issues even after we felt those issues had been resolved," she said.
Singleton, noting that mass cancellation letters were not routine, said this call volume was 40 to 50 times more than average customer monthly calls. She would not say how often customers can call before being deemed too demanding.
The company also declined to say what percentage of monthly service calls the 40,000 figure represented.
Singleton said some of the cancellations involved customers who repeatedly asked for information about other people's accounts.
Sprint waived final balances on canceled accounts and gave customers 30 days to transfer their phone numbers to other wireless providers, she said.
"We're working very hard to improve customer service. That's our number one priority," Singleton said.
Sprint, which has about 53 million subscribers, has been trying to upgrade its customer base, tightening credit requirements and attempting to attract customers who will spend more each month on data services, such as Internet browsing, music downloads and streaming video.
The termination letters started going out days before Sprint kicked off a nationwide "Sprint Ahead" ad campaign on July 1. Sprint's customer growth has disappointed investors for several quarters after its marketing message was criticized as being confusing and it had network problems after its 2005 purchase of Nextel.
During the most recent quarter, the company said it gained just 600,000 new customers, while AT&T and Verizon gained 1.2 million and 1.7 million, respectively.
Providers AT&T Inc and Verizon Wireless, a venture of Verizon Communications Inc and Vodafone Group Plc, were quick to point out differences between their policies and Sprint's, saying they very rarely cancel services.
AT&T, the U.S. wireless service with the greatest number of subscribers, sometimes cancels or restricts services for customers for "excessive data or voice roaming on other carriers' networks," according to spokesman Mark Siegel, who said competitors had similar policies.
Tom Pica, a spokesman for Verizon Wireless which is second to AT&T by number of customers, said his company sometimes cancels services for callers who are "extremely abusive" to its customer service representatives. But, he said, this would be handled on a case-by-case basis.
Industry watchers are surprised that Sprint would risk bad press just to economize on service to 1,000 high maintenance customers, a minimal fragment of its 53 million customer base, especially when the company is struggling to catch up with its competitors.
Disgruntled customers got their balances wiped clean, and were given 30 days to take their number to another carrier with no penalty.
“I am sure for some customers; they got exactly what they wanted from this,” said Denove.