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Summary:

At an analyst conference, Sprint CEO let slip a change in Sprint’s data policies that could have a big impact on iPhone and other smartphone customers lured in by Sprint’s unlimited plans: the carrier has been throttling back speeds to the heaviest consumers of smartphone data.

sprint-iphone-feature

While Sprint CEO Dan Hesse appeared at Citi’s Entertainment, Media and Telecommunications conference Thursday to talk up Sprint’s new LTE plans, he let slip a change in Sprint’s data policies that could have a big impact on iPhone and other smartphone customers lured in by Sprint’s unlimited plans. Hesse acknowledged that Sprint has been throttling back speeds to the 1 percent heaviest consumers of smartphone data. While technically, the service is still unlimited, the admission leaves egg on Hesse’s face since he’s criticized the competition for adopting similar data restrictions in the past.

Sprint’s data policies still remain the most liberal of any operator’s. AT&T and Verizon Wireless have stopped offering no-limit plans for new customers, and for subscribers with grandfathered unlimited plans, they start braking bandwidth much sooner than Sprint. Verizon’s speed bumps go into an effect for the top 5 percent of 3G data users when they’re in a congested cell (4G customers are exempt), while AT&T is downgrading speeds for heaviest unlimited data users indiscriminately as soon as they cross the threshold into the top 5 percent. T-Mobile’s policies are a little clearer: its “unlimited” customers buy a bucket gigabytes each month, and while they can exceed the cap without charge, their bandwidth will be cut back.

Sprint may still have the best data deal in town, but it’s no longer unlimited according to Sprint’s own definition. When Sprint’s competitors started implementing caps and restrictions, Hesse took to the airwaves to decry those policies, singling out throttling by name. Those commercials have since stopped and apparently so has Sprint’s attitude toward data use restrictions.

The timing of these new policies aren’t coincidental as Sprint just landed the iPhone. If Sprint enjoys the same success with the iPhone 4S as Verizon and AT&T, then it will find its 3G network suddenly flooded with data traffic from millions of new smartphones. The new throttling policy won’t do much to limit use, but it will keep the most extreme data users from draining bandwidth from the network. That’s bound to infuriate some as many customers likely switched to Sprint precisely because they would face no restrictions, lured in by the promise of streaming video and music to their hearts’ content.

Sprint couldn’t maintain its open networks policies forever – truly unlimited plans just aren’t feasible. The throttling policy is probably just the first step before its forced to do away with unlimited plans altogether – as its done with its data modem service – just as its competitors have.

  1. Who needs tiered data plans when you can lie about the meaning of “unlimited.” Simple, isn’t it?

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  2. Nice. New years resolution for Hesse — no more lying on tv. It’s easy to offer an unlimited plan when you don’t have the Jesus phone.

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  3. “…truly unlimited plans just aren’t feasible”

    I beg to differ. The future of mobile broadband lies in speed-based pricing for 4G and newer technologies, much the same way DSL is priced today. Sprint is wise to work with Clear because Clear has an abundance of spectrum, and Clear has always offered unlimited 4G service:

    http://lgponthemove.blogspot.com/2012/01/off-beaten-track-why-mobile-broadband.html

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    1. Kevin Fitchard Thursday, January 5, 2012

      Hi Luscious, I see your point. And I can see how how a limited-bandwidth unlimited plan might work, but I still believe that any kind of open-ended plan that could support video or any other high-bandwidth service would work. I think it’s just a just case where economics and physics will never find common ground.

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  4. There is no such thing as network abusers. What negatively impacts data networks are large numbers of users, not a few that use data for long periods of time.

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  5. It’s all seems like a scam. How do they get away with calling it “Unlimited” when it’s clearly not?

    I have an “Unlimited” data AT&T account, and have experienced throttling firsthand. After hitting 5GB, I received a text message from AT&T at 7am, and my speeds were reduced from ~200KBPS to ~10KBPS. Of all the wireless providers, AT&T is the worst. They get away with murder.

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  6. Hello,
    This article needs to be updated to reflect the fact that Mr. Hesse was mis-quoted. He actually said “Off-network” usage would be throttled..which is accurate because according to the Sprint TOS you are only allowed 300Mb of off network usage….
    Also, according to CNET, Sprint told them that Pre-Paid usage is also throttled..again previously announced..

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    1. Kevin Fitchard Friday, January 6, 2012

      Hi Stephen, I did a new post on this morning. I wouldn’t say Hesse was misquoted. He might have misspoke, but he was clearly talking about managing connections to prevent abuse the heaviest users from abusing the network. He used roaming in Montana as an example, but it would be a big stretch to say he was only talking about roaming data usage. Here’s the post:

      http://gigaom.com/mobile/sprint-unlimited-still-means-unlimited/

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  7. Nicholas P. Iler Friday, January 6, 2012

    Any network operator saw this coming from a mile away. The same thing they used to get us to signup is the same thing they will use against us, and we have no choice in the matter.

    Like offering unlimited food to people for two months and then all of a sudden deciding to rape them after dinner even night, after they have gotten used to pleasent daily meals. Metaphoric speaking.

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    1. Kevin Fitchard Friday, January 6, 2012

      Wow Nicholas, that’s quite the metaphor. :)

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  8. There’s a difference between unlimited data and unlimited High-speed data. No carier offers unlimited High-speed. But no one can argue that Sprint and T-mobile do Offer unlimited data. Throtled when you reach certain peaks, but still usable for email and mobile website versions. Sprint is a liar however, because they do not tell customers they will be throttled. T-mobile tells you you get unlimited data with a certain amount of high-speed data.

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  9. So I guess what we need are the tools to manage the speed we were sold when we signed our contracts vs. the carriers desire to let us use overflow. Sounds like net neutrality issues.

    The carrier may argue in court that we as individuals and companies signed the contracts that give them the exceptions and legal loopholes, but:
    1) You cannot get the contract until you are in the store. Hard to have a lawyer do a house call let alone a store call.
    2) Asking the company representative locally present (store staff) gives different impressions and answers, so it would appear that when the CEO comes on broadcast media that he is more representative of the contract then the electronic copy you sign with a promise of you can print it out later.
    3) Store staff tells you not to worry, there are no ‘catchas’ in the contract.
    4) The contract leaves no room for negotiation or the ability to modify.

    So, what tools do we user need to manage speed?
    1) The ability to set times of my convenience for slow speed. I don’t need high speed at 3am while I sleep to update my carrier apps (vcast, ….) at the beginning of the month. I also don’t need it waking me up asking me if I want to reboot my phone. My gmail can sync at slow speed while I am in REM sleep. If I am in a theater, it can take its time.
    2) The ability to choose what apps are high speed – SMS messages at slow speed (assuming the issue is data flow vs. data switching or latency) is fine, streaming apps are not. Or let me touch the ‘fast’ button or the slow button (I want to show this video to John, but I will start it before we have salad).
    3) Better ability to cache easier- The ability to pre open apps while I sleep and download (wait that adds more traffic to carrier, rather then less; but I am in control). Let me create a music stream for the morning while I am sleeping. Easier is defined as my ability to easily manage exceptions, and standard rules.
    4)Easier management of better data access – the carrier should put more hot spots in common locations – airports, cash stations and gas stations, sponsor libraries and town halls wifi. But don’t make it a 10 minute ordeal to get logged in before my apps will start flowing.
    5) Simple override for different materials (apps) as to whether they are high speed or low speed.
    6) More sharing of what your real capacity is. The maps that carriers provide are insulting. When I shop and have to commit to 2 years:
    – let me know is my office truly in 4g,
    – is that new territory I will be traveling to in 1x or roam,
    – is the new breakfast place being built that I plan on weekly client meetings in 3g or 4g,
    – will my couch spend more time cycling to 3g or 4g in bandwidth slot machine (it truly does spin between 1x, 3g, 4lte sitting on the couch, I was SOLD 4g coverage for a stick 1 story slab house).
    – you know that the office park being built will make coverage in my favorite hotel substandard for the next 15 months.
    7) Let us know how over-capacity you are by area. If I am being bounced to different towers because you sold a corporate account next to my best client, let me know that I am on 3g because I am lower on your income totem pole then the client that is paying half the rate I am.

    A whole lot of this is work in partnership with your customers instead of treating them like cattle. Perhaps most of us will be more willing to work in partnership with you. Instead, it is in our best interest to raise the data bar to for the carriers to increase capacity.

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  10. AT&T could spend some of those billions of dollars to fix what it says is overloaded data and stop looking so greedy. What do they mean when they say it gets overloaded but you can pay $10.00 extra a gb and its ok.and if you change your plan you lose your unlimited plan now it’s they will slow your speed if you use to much unlimited data.they treat us like we’re stupid!!!

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