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Optical/IP

Spr*nt Goes Co*st to Coa*t

The launch of Sprint PCS's (NYSE: PCS) much-vaunted nationwide CDMA2000 1xRTT high-speed network is full of holes. The low-cost pricing for data services that the carrier was promising hasn't materialized (see Sprint: Next-Gen Data Services Should Be Affordable), and Sprint is somewhat stretching the definition of "nationwide," as it doesn't cover towns and cities with fewer than 100,000 people living in them.

Sprint, the last major U.S. carrier to launch a high-speed data service, is promising 3G from sea to shining sea with its "PCS Vision" service (see the "Air Interfaces" section in A Wireless Taxonomy for why we don't class CDMA2000 1xRTT as a true third-generation service). However, although the carrier has come out of the gate with a larger footprint than its rivals, the claim of nationwide coverage isn't strictly accurate.

Mark Lowenstein, managing director of consulting firm Mobile Ecosystem, describes the launch as "quasi-nationwide." There are 243 cities in the U.S. with populations over 100,000, according to the U.S. Census Bureau. In a state such as Utah, for example, there are virtually no towns over the 100,000 mark, outside of major population centers such as Salt Lake City.

"So, if you're living in a rural area you're not part of the nation?" asks Roger Entner, program manager of the Yankee Group’s Wireless/Mobile Services research and consulting practice.

Sprint still has better coverage than major rivals such as Verizon Wireless, according to Lowenstein. However, none of Sprint's rivals are claiming nationwide coverage for their 2.5G services.

When Unstrung spoke to Sprint back in April, the carrier said that it was planning to price its data offerings lower than its rivals, hopefully kicking off an upswing in wireless data usage (see Sprint: Next-Gen Data Services Should Be Affordable).

"Current services are priced a little too high for most enterprises to adopt them," Kevin Packingham, senior manager of business marketing at Sprint told us. "We’re going to be sure to price the service so that users don’t have to be ticking away kilobytes in the back of their heads as they’re downloading data." Yet the carrier has merely matched the $99 a month all-you-eat data pricing plan for business users offered by CDMA rival Verizon (in fact, Sprint's plan is 99 cents more expensive). The firm is currently running an introductory offer whereby business users pay $49.99 for unlimited usage for the first three months, $99.99 after that. Just before Sprint launched the Vision PCS service, Verizon started offering a free month to new subscribers to its data service (see Verizon's Pricing Dash).

Here's how Sprint PCS spokesperson Dan Wilinsky laid out the pricing plans for Unstrung [ed. note: with a refreshing real-world touch, he rounded them up to the nearest dollar]. The consumer plans include differing levels of voice minutes, while the business plans are aimed at wirelessly-enabled laptop and handheld users.

The consumer pricing runs between $45 and $120 a month, bundling between two and eight megabytes of data downloads with up to 2,000 voice minutes.

Table 1: Business plans
Price per month Megabytes of data
$40 20
$60 40
$80 70
$120 120


Wilinsky says the high-end packages offer a lot of megabytes for the user. Unstrung thinks that you have to look at how Sprint expects people to use these packages.

Yes, 70 Mbytes is a lot of data when you're downloading text messages or email over a WAP connection directly onto the phone. But Sprint expects business users to be downloading data to a laptop or PDA via a wireless modem -- i.e., surfing the Web, downloading Powerpoint presentations, and accessing their desktop corporate email. You can chew through a lot of data that way.

Analyst impressions on the pricing schemes vary wildly.

"I'm not blown away by them," says Yankee's Entner. "They could have been more aggressive."

Mobile Ecosystem's Lowenstein declares: "Sprint's marketing plan for wireless data is the most aggressive in the industry. A rising tide should lift all boats, and we should see the most newsworthy fourth quarter in wireless in some time."

Regular readers will know that how carriers price this initial wave of high-speed data services is a hot topic for Unstrung. We'd be interested to hear your viewpoint on this important issue; post your opinion on the message board below.

Sprint is kicking off the service with mobile phones from Samsung Electronics, LG Electronics Inc., Sanyo Corp., and Handspring Inc. They'll go on sale in Sprint stores from Sunday.

— Dan Jones, Senior Editor, Unstrung
http://www.unstrung.com
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