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The Great Data Divide

Dan Jones
8/30/2010

5:40 PM -- The divide between how US operators choose to price their data services is becoming ever more obvious.

While AT&T Inc. (NYSE: T) and Verizon Wireless have either moved to usage-based pricing, or are considering the possibility of charging a premium for new services, Sprint's Virgin Mobile USA Inc. (NYSE: VM) unit and Clearwire LLC (Nasdaq: CLWR) are pushing down data pricing with new unlimited, no-contract plans. (See Clearwire Pushes Pay-as-You-Go With Rover.)

Of course, there have always been low-cost, pre-paid carriers in the US, like Leap Wireless International Inc. (Nasdaq: LEAP) and MetroPCS Inc. (NYSE: PCS). This emerging split in data pricing strategies, however, seems to indicate a way that Sprint -- and other smaller carriers -- could actually compete more effectively against the big two. The Virgin Mobile $40 per month unlimited 3G data plan, which runs over the Sprint CDMA network, seems to show that the operator may have a little more spare capacity in its network than, say, AT&T. It certainly has many fewer customers! Sprint can also work with Clearwire to get users onto WiMax in 49 cities in the US.

It could make sense for the operator to offer a no-contract scheme similar to what Clearwire plans with its Rover, but with 3G roaming onto its network as the bonus feature. Certainly the operator needs to exploit the appeal of unlimited data for consumers -- even if many don't actually hit their monthly caps anyway -- for as long as it possibly can.

Sprint's approach to data pricing still seems a little scattergun at the moment, however, to me anyway. I don't understand the logic behind its recent $10 mandatory 4G data charge for the EVO phone if it is then going to support a $40 3G unlimited MiFi data plan, with potentially multiple WiFi devices sucking down data on its 3G network. (See Virgin Mobile Offers $40 Unlimited MiFi Plan.)

— Dan Jones, Site Editor, Light Reading Mobile

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