Sprint: Unlimited still means unlimited

Sprint CEO Dan Hesse

Sprint is walking back comments from CEO Dan Hesse on Thursday about Sprint ‘throttling’ data speeds of its heaviest data users even though they subscribe to unlimited plans. At a Citigroup conference on Thursday, Hesse clearly stated that Sprint was reining in bandwidth for its greediest smartphone customers, who Hesse described as abusing the network. But Sprint executive Bill White told CNET that Hesse was referring only to roaming customers off of Sprint’s primary networks – a policy that has been in place for some time. For any smartphone on Sprint’s 3G or 4G networks, unlimited still means unlimited, White said.

Like all operators, Sprint doesn’t run networks everywhere it offers service. It contracts out with dozens of smaller regional carriers to provide coverage in smaller towns and rural highways, allowing it to focus on cities and major traffic corridors. Those roaming agreements aren’t free, though. Sprint has to pay those operators for every MB its customers consume, leading it to cap data out-of-network at 300 MB per month. Sprint also places caps and use restrictions on its data modem plans, hotspot features in smartphones, and on its Virgin Mobile and Boost Mobile prepaid services. Sprint, however, has kept its smartphone unlimited plans restriction free because of the competitive advantage they give it over its competitors, all of whom cap or throttle data.

Unlimited staying unlimited has to be a relief to Sprint’s customers, many of whom gravitated to the operators precisely because it is only major carrier to offer data plans restriction-free. The question is how long Sprint can maintain that policy. Darrell just wrote about how the iPhone 4S is slurping up twice to three times the data of its predecessors. Sprint just landed the iconic device, which is sure to flood to its 3G network with tons of new traffic.

And if Sprint is concerned about data abuse, then it has that worst policy imaginable to combat it. The most heavy-handed smartphone customers who found their data use curtailed or capped by AT&T and Verizon Wireless will likely migrate to Sprint where they face no restrictions on consuming 20, 30 even 100 GB of data a month. The only thing preventing a mass exodus are the limitations of Sprint networks. The iPhone has to cope with Sprint’s slower EV-DO 3G network. Meanwhile its 4G WiMAX network is fast, but it only covers a third of the country.

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