Sprint Nextel (NYSE:S) notified customers that starting in November it will no longer offer mobile broadband plans with unlimited access to Clearwire's (NASDAQ:CLWR) mobile WiMAX network, eliminating one aspect of Sprint's market differentiation.
Sprint said the rate-plan changes will not affect smartphone customers and will apply to tablets, netbooks, notebooks, USB cards, connection cards or Mobile Hotspot devices. In a statement on its online support site, Sprint said that "effective beginning with your next bill following notification, your on-network monthly data allowance will no longer include unlimited 4G. There are no changes to your monthly recurring charges, on-network overage rates, off-network overage rate, or off-network data allowance."
Currently, Sprint offers three different rate plans for mobile broadband devices: 3 GB of EV-DO data with unlimited WiMAX for $45 per month; 5 GB of EV-DO data and unlimited WiMAX for $60 per month; and 10 GB of EV-DO data and unlimited WiMAX for $90 per month. Under the new plans, EV-DO and WiMAX data will fall under the same data cap, with a 5 cent per MB overage charge. Mobile Hotspot add-on service for smartphones will be limited to 5 GB of combined EV-DO/WiMAX data.
"Sprint is making these changes to help ensure we can continue to invest in areas that matter to our customers and that differentiate us from our competitors: simple and unlimited pricing plans, including unlimited data on the Sprint network without throttling for smartphones; cutting-edge selection of 4G, Android and other devices and strong customer service," Sprint spokeswoman Emmy Anderson told FierceWireless.
However, the move could be potentially be geared to limit Sprint's payments to Clearwire for usage of Clearwire's WiMAX network. Clearwire bills its wholesale customers like Sprint for the amount of data they use on its WiMAX network.
The changes are notable especially in light of the fact that Sprint has positioned its unlimited data plans as a key point of differentiation from AT&T Mobility (NYSE:T), Verizon Wireless (NYSE:VZ) and T-Mobile USA, especially for smartphones. Sprint launched an advertising campaign earlier this spring based around its unlimited data proposition.
Anderson reiterated that the changes do not apply to smartphones. "I would also add that the majority of Sprint's existing Mobile Broadband customers use less than the amount of data included in their plan, even when 3G and 4G usage are combined as they will be when this change takes effect," she said. "And we plan to launch new Mobile Broadband plans in the coming weeks that deliver even greater value. Both new and existing customers will be eligible for the new plans when they launch."
The move away from unlimited data also comes as Sprint has begun preparations for the launch of its LTE network by mid-2012. At an investor conference earlier this month, Sprint said that to get more capacity it plans to introduce Wi-Fi offloading this quarter as well as new femtocells and optimization technology.
In April Sprint and Clearwire announced a revised deal in which Sprint will pay Clearwire $1 billion this year and in 2012. Sprint is both Clearwire's majority owner and its largest wholesale customer. The two companies forged an agreement on wholesale pricing related to Sprint's devices that operate on Clearwire's network. The agreement includes a minimum payment per device as well as usage-based pricing and data traffic volume discounts. Clearwire has said that on average users of its network use around 7 GB of data per month.
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