Sprint iPhone, unlimited data? Not for long
An all-you-can-eat data plan for the iPhone would be a boon for consumers, but history and the potential network strain suggest this may end up as a limited time offer.
If Sprint Nextel sells the next iPhone with an unlimited plan, snap it up while you can, because it may end up as a limited time offer.
According to a Bloomberg report, Sprint plans to offer the next , which would be consistent with its offering for other smartphones.
Such a plan, however, can't persist. The iPhone brings with it heavy data consumption, which can strain a network. AT&T and Verizon Wireless, meanwhile, were forced to switch to a tiered-pricing plan only after getting Apple's device. One analyst believes Sprint could offer the iPhone with an unlimited plan for another year, with others saying the window could be shorter.
"There's a good chance they will use this to pull subscribers from AT&T and Verizon," said Maribel Lopez, an analyst at Lopez Research. "After a certain time, they won't offer the unlimited option any more."
A Sprint representative declined to comment to CNET on potentially selling the iPhone, but noted that there haven't been any changes to the unlimited data component to its current smartphone plans. An Apple representative also declined to comment.
It's easy to see why Sprint would want to make this move. The carrier is a distant third in the wireless race, and needs to stand out with at least three players offering essentially the same device. While the company has slowed down its customer defection, with most of the losses coming from its soon-to-be-defunct Nextel network, it is still working to solidify its customer base.
Sprint also isn't a stranger to data-heavy phones. But its top-tier devices, including the Evo 3D, the Photon 4G, and the original Evo, are all capable of riding on a 4G network, easing the traffic on Sprint's core 3G network. In cities where 4G WiMax is available, Sprint customers are actually riding on a network run by Clearwire. Much of Sprint's excess spectrum is tied up with its own 4G plans.
The upcoming iPhone, which isn't expected to be compatible with the 4G WiMax network, could bring an unprecedented crush of data traffic to Sprint. Like the Verizon version, it will only run on the 3G network, so there is no way to offload that traffic beyond a Wi-Fi connection.
A recent study from Validas noted thatwhen it comes to data consumption, and its truly unlimited plan already attracts the heaviest users. Adding the iPhone will only accelerate that trend, applying additional pressure on the company.
Verizon only waited a few months after it launched the iPhone before moving to a tiered pricing structure in July. The company, however, had talked about the need to make the switch.
Sprint Chief Executive Dan Hesse has talked about data traffic eventually being an issue. But he has never given a time frame for when the unlimited plan could end.
In the meantime, the company continues to lean on its fully unlimited plan as a competitive edge beyond price. The carrier has increasingly stood for unlimited service, with commercials mocking caps and throttling, which is the practice of slowing down the connection speed of excessive users.
Eventually, Sprint will have to take a serious look at these practices for itself if the iPhone comes with an unlimited plan.
"If and when that happens, Sprint will feel the impact," said Roger Entner, an analyst at Recon Analytics.
For now, Sprint will likely be happy to take on the burden if it means spurring additional customer growth. The company needs to show it is turning things around now, and worry about the consequences later. Having too many data-intensive customers is better than watching subscribers leave quarter after quarter.
"It's one of these problems that every carrier loves to have," Entner said.