Sprint announced the change in a press release angling to buy consumers' sympathy about the wireless data explosion to justify the rate hike. It said that the premium charge will assist it in "offering simple and affordable unlimited plans for its customers while maintaining a wireless network able to meet the growing appetite for a richer mobile experience."
Existing Sprint smart phone users won't be affected, unless they upgrade to or activate another smart phone. The charge doesn't apply to plans on data cards either.
Why this matters
Sprint's WiMax customers on the High Tech Computer Corp. (HTC) (Taiwan: 2498) Evo and Samsung Corp. Epic already pay an extra $10 for 4G speeds, a pricing decision that irked a lot of Sprint's early adopters. So, while applying the fee to 3G may be understandable given the depths to which some users are pushing unlimited usage allowances, the fact that it's occurring on a slower network is likely to elicit more grumbles.
Its unlimited plans have been popular too, helping Sprint add 354,000 new subscribers with two-year contracts in the third quarter. (See Sprint Gives 'Leapfrog' Details.)
Bob Johnson, Sprint's president of consumer business, points out in the release that some of its competitors (namely AT&T Inc. (NYSE: T)) impose overage charges and "complex plans," which Sprint is trying to avoid at all costs. With the $10 increase, Sprint's Simply Everything plans still come in below comparable plans at AT&T and Verizon Wireless , but are higher than T-Mobile US Inc. . (See AT&T Intros Mobile Data Caps.)
All four of the nation's leading carriers, along with their smaller competitors MetroPCS Inc. (NYSE: PCS) and Leap Wireless International Inc. (Nasdaq: LEAP), are grappling with how to address skyrocketing data usage, and T-Mobile and Verizon will ultimately have to decide whether to follow Sprint into increased, albeit unlimited prices, or track AT&T into tiered plans and usage caps.
Sprint has been driving home its unlimited message even as its competitors move to tiered pricing. For more on the carrier price wars, check out the following stories:
- MetroPCS Continues 4G Price War
- Sprint Sticks With Unlimited Data Plans
- AT&T Enforces Data Cap on Femtos
- Verizon's Advantages: Unlimited Data & Android
- Capping the Data Gusher
- No Surprise: Verizon Talks Tiered Pricing for LTE
— Sarah Reedy, Senior Reporter, Light Reading Mobile