Unlimited data pricing to stay for Sprint iPhone customers, but for how long?

editor's corner

Sprint Nextel (NYSE:S) is entering the fray with the Apple (NASDAQ:AAPL) iPhone, and it has confirmed that its unlimited smartphone data plan will come attached to the iPhone 4S when the carrier puts the device on sale Oct. 14.

The move, of course, only makes sense. It's the main way to lure subscribers. AT&T Mobility (NYSE:T) started out offering the iPhone that way as did Verizon Wireless (NYSE:VZ). Both now sell tiered data plans. The iPhone, as everyone knows, tends to cause a spike in data traffic. But Sprint moving in the tiered data direction eventually isn't so cut and dry for the No. 3 carrier, which is clawing its way back to profitability and strong subscriber growth. Pricing is its main differentiator at this point.

Sprint has a hard time competing on equal footing with AT&T and Verizon, which are already jockeying for premier iPhone position. AT&T is touting the iPhone's ability to run on its HSPA network and the combined portfolio of the iPhone 3GS, iPhone 4 and iPhone 4S. Verizon is playing up what it has always played up: its superior network.

Of course the main question is: How long can Sprint offer unlimited iPhone data plans? Validas, which analyzes the mobile-phone bills of consumers, recently studied the mobile-phone bills of consumers for a year--from June 2010 to July 2011--and discovered that Verizon recorded the largest jump in smartphone data usage at 150 percent. AT&T Mobility was second with an increase of 116 percent. Validas postulated the growth was due to the proliferation of the iPhone. Meanwhile, Sprint saw an increase of 69 percent.

Still, Sprint is no stranger to handling data growth; its Android devices are no slouch when it comes to data. As such, Validas found that Sprint users consume the most data--nearly 400MB per month--thanks to the operator's refusal to place caps on data usage.

Earlier this week Bob Azzi, Sprint's senior vice president of networks, told attendees of the PCIA 2011 Wireless Infrastructure Show that the company was better equipped to respond to the network capacity demands of smartphone users and stay ahead of the growth curve because it had infrastructure giant Ericsson managing its network. Moreover, Azzi said Sprint is exploring EV-DO Advanced, otherwise known as EV-DO Rev. B, which bumps up EV-DO peak download rates via software and hardware upgrades. The company is expected to reveal its 4G network strategy on Friday.

Perhaps most interesting: If Sprint manages to pull off an unlimited smartphone data plan long enough, that feat will say a lot for the case for managed network services, which are still receiving a tepid reception in the U.S.--Lynnette

P.S. On a sad note, I wanted to commemorate the legacy of former Apple CEO Steve Jobs, who passed away yesterday, by posting one of my favorite quotes of all time. This is a portion of a commencement speech Jobs gave at Stanford University in 2005. He truly listened to his inner voice.

"Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma--which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary."

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