(Reuters) - Customers who switch to Sprint Corp from Verizon, AT&T and T-Mobile will have to pay only half of what they pay for their existing plans, the No.4 U.S. carrier said in a bid to lure users to its network ahead of the holiday season.
Shares of the company, which is in the middle of a turnaround plan and has vowed to cut over $2 billion in costs by the end of 2016, were down about 8.4 percent in afternoon trading.
The offer will not apply to all plans from its competitors, such as T-Mobile US Inc's unlimited data plan, the company said.
Customers can sign up between Nov. 20 and Jan. 7 for the new rates, which will remain valid until January 2018. Customers can try Sprint for 28 days and leave if they are unsatisfied, the company added.
This offer is similar to Sprint's "Cut your bill in half" plan, introduced in December last year, where it said it would slash monthly costs in half for customers who switched over from AT&T Inc and Verizon Communications Inc.
However, this year's offer has been expanded to include switchovers from T-Mobile, which surpassed Sprint to become the third-largest U.S. carrier in mid-2015.
"We want to do something that persuades American consumers to give us a try," Chief Executive Marcelo Claure said on a media call.
Earlier this month Sprint said it aimed to slash fiscal 2016 expenses by as much as $2.5 billion through layoffs and a wide array of cost controls.
Investors worry that Sprint, which is locked in an aggressive battle for subscribers with its rivals, has been burning cash at an alarming rate as it tries to acquire customers and clean up its balance sheet.
Sprint has "done sufficient analysis and this is very accretive" to its business, Claure told reporters on the call when asked how he would balance cost cuts with this new initiative.
The company is also offering a free tablet to existing customers with free service up to a year for as long as supplies last. It will pay up to $650 in termination fees to those who switch from other networks, it said.
The announcement comes after T-Mobile said last week it will give customers a new option to stream video from services including Netflix Inc and Hulu on their mobile devices without having it count against their data plans. T-Mobile also said it had increased rates of some of its plans.
Reporting by Malathi Nayak in New York and Anya George Tharakan in Bengaluru; Editing by Savio D'Souza and Alan Crosby