"Simply Everything" is no Digital One Rate

 

"Simply Everything" is no Digital One Rate  

Yesterday Sprint Nextel CEO Dan Hesse painted a bleak picture for investors about the possibility of a quick turnaround for the company. He frankly admitted that the troubles at Sprint were "more difficult than what I had expected."

Hesse talked extensively about how the operator needs to focus on the customer experience and rebuild its brand to improve perception. The first step is the launch of the "Simply Everything" plan, where for $100 per month customers will get unlimited voice and data access, including text messaging, mobile TV, email and push to talk.

While this new plan is significant, I feel like Verizon Wireless, AT&T and T-Mobile USA stole Sprint's thunder by coming out with unlimited voice plans (or in T-Mobile USA's case, unlimited voice and text messaging) on Feb. 19.

I couldn't help feeling sorry for Hesse as I listened to yesterday's earnings call. Like an aging athlete that keeps referring to his glory days on the football field or basketball court, Hesse kept talking about his past experience at AT&T Wireless when in 1998 the company launched the Digital One Rate plan. The Digital One Rate plan was revolutionary because it, for the first time, bundled long distance and roaming fees into a simple airtime minute equation that we all take for granted today. The Digital One Rate plan was largely credited with driving a whole new wave of wireless adoption by consumers in the late 1990s.

Sure, Digital One Rate was a huge step for the industry, but to compare Sprint's Simply Everything plan with Digital One Rate is a stretch. While I commend Sprint for bundling unlimited voice and data into one package, I think they are also taking a big risk. We know that offering consumers unlimited data can be a dangerous equation. Verizon learned this the hard way when certain customers started taxing its network by downloading huge amounts of data. Verizon has since scaled back and its new BroadbandAccess plans, available on March 2, will offer customers monthly data plan options of 50 MB data usage for $39.99 or 5 GB data usage for $59.99.

Perhaps Sprint will be able to poach some of Verizon Wireless' and AT&T Mobility customers because of its unlimited data usage. But I'm not sure that Sprint will benefit from attracting these customers. Maybe Sprint plans to lure those big data users to its WiMAX network Xohm, when it becomes commercially available later this year. Nevertheless, Simply Everything is not the next Digital One Rate and Hesse needs to quit referring to his 1998 glory days at AT&T and instead focus on what he can do to get Sprint back in the game in 2008. -Sue 

P.S. Don't forget to join me next Wednesday, March 5 at 2 p.m. EST for a Webinar on "Mobile Broadband and the 4G Roadmap." I've got some great guests including Ali Tabassi, vice president, technology development at Sprint Nextel, Arun Bhikshesvaran, CTO and vice president strategy and marketing at Ericsson, and Peter Jarich, research director at Current Analysis.  Register here.