Sprint Nextel (NYSE:S) will use its unlimited data plan to gain a competitive edge in the race to attract customers with Apple's (NASDAQ:AAPL) iPhone 5, which supports LTE.
Apple debuted the device Wednesday and said it will be available in the U.S. through Verizon, AT&T Mobility (NYSE:T) and Sprint. Speaking at the Bank of America Merrill Lynch Media, Communications and Entertainment Conference, Sprint CFO Joe Euteneuer said that although Sprint doesn't have as big of an LTE footprint as its competitors, it is the only operator selling the iPhone 5 in the U.S. with an unlimited data plan. "It will come down to the consumer decision," he said. "Do they want a metered plan with their service or do they want unlimited?"
Sprint just launched its LTE network in July in a handful of markets, but the carrier expects to cover 123 million POPs by year-end. Meanwhile, Verizon's LTE network currently covers 75 percent of the U.S. population, around 235 million POPs, and the carrier plans to hit 260 million POPs by year-end. AT&T's LTE network covers more than 75 million POPs, and the carrier plans to expand that to 150 million POPs by year-end.
Euteneuer added that earlier this week Sprint announced that it has completed deploying LTE in five markets and said that it was preparing 100 more cities for LTE, including Boston; Chicago; Indianapolis; Los Angeles; Miami; Nashville, Tenn.; New Orleans; New York; Philadelphia; and Washington, D.C. The company believes that by announcing these 100 more markets, customers will see that they can buy an LTE iPhone now with an unlimited data plan and take advantage of the LTE speeds when their market launches later this year. He also said that the company is currently selling other models of LTE phones in non-LTE markets and they are selling very well. "Consumers are looking for an experience that will be fine," he said. "It will be fine now and get better when you get LTE."
Sprint executives have always maintained that the company is committed to unlimited data but Euteneuer hinted that down the road it may shift to metered pricing or look at other ways to price its services to grow its revenues. "When we finish LTE we can look at where our competitors stand on metered pricing and price our stuff accordingly. Having unlimited data is a premium product so maybe we price it at a premium," he said, adding that there also might be opportunities for bundled services or add-on services such as the mobile wallet.
Interestingly Euteneuer said that the company has not seen any impact from T-Mobile USA's recent announcement that it would be offering unlimited data also. "They have been advertising unlimited for the past year even though they didn't have unlimited. We didn't see any impact from that," Euteneuer said.
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