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Sprint to start limiting unlimited 4G broadband. Smartphones next?

One of Sprint’s (s s) only marketing advantages was the promise of unlimited 4G broadband. But that distinction is fading fast. Friday, the third place carrier announced it was doing away with unlimited 4G mobile broadband for mobile hotspots and devices and was instead instituting three new tiered data plans. And the kicker: there’s no grandfathering of existing unlimited plans.

Smartphones are not included, for now. But it’s a big blow for unlimited data fans and undercuts one of Sprint’s big marketing messages in the market. And it raises questions about whether unlimited in mobile is sustainable if the last leading proponent caves in, even partially.

Under the new tiers, which start in November, users of mobile hotspots, USB modems, tablets and notebooks will pay $45 for 3 GB of combined 3G and 4G, $60 for 5 GB and $90 for 10 GB of combined data. Consumers will pay an additional 5 cents per megabyte over their monthly limit. Previously, users had limits on 3G data but 4G was unlimited.

Sprint was already showing signs that it couldn’t keep up the unlimited game forever. It announced last month that it was doing away with unlimited data for its smartphone hotspot feature and was capping data at 5 GB a month. But to now extend that to mobile hotspot devices and mobile broadband plans for connected devices, it makes you wonder how long before the end of unlimited data comes to smartphones. Unlimited data was a selling point for the Sprint iPhone (s aapl) and may have been helpful in luring some heavy data users away from other carriers. But if Sprint can pull the rug out from under them like they’re doing here without the promise of grandfathering them in, it could cause a lot of bad feelings.

I’m curious why Sprint is doing this now. I can understand if it was worried about 4G WiMAX data being affected by a hot new phone like the iPhone, but the iPhone 4S only supports 3G. This suggests 4G was already getting congested or offering unlimited data WiMAX plans was becoming too expensive. If that’s the case, it does make me wonder how long Sprint can keep offering unlimited 4G for smartphones.

Stephen Bye, Sprint’s CTO, said at our GigaOM Mobilize conference last month that the carrier was committed to unlimited data plans because it gave the operator a differentiator. But he admitted that there are big costs to keep up with in offering unlimited broadband. “Is there pressure [on cost for unlimited data]? Yeah, and we’ve got to look at how to get the cost structure down to continue to offer this,” said Bye.

We’ll see if this the beginning of the end of Sprint’s unlimited 4G offering, and I have to assume it will extend to smartphones at some point. To make such a turn in the course of less than a month suggests Sprint is having to react to a lot of pressures, both financial and network-related. It’s facing a lot of scrutiny about its plans to launch an LTE network next year and whether it will have enough money to make that happen. With so much going on, I wouldn’t hold my breath for unlimited 4G to stay a reality for Sprint smartphones. It was nice to have unlimited bragging rights, but it may be too expensive to keep that up now.

8 Responses to “Sprint to start limiting unlimited 4G broadband. Smartphones next?”

  1. It would behoove those negotiating corporate agreements to get Sprint to set a time frame for providing unlimited data for smartphones. Unlike consumer plans were the terms and conditions can change as needed, negotiated corporate plans have contractual terms and conditions that must be honored. Our clients will continue to receive unlimited data until their contracts end, and we encourage those negotiating agreements to stipulate unlimited data for their smartphones in light on the recent changes to aircards.

    In the consumer space going forward data should be pooled, just like voice minutes. The carrier that deploys that plan first should get some market recognition. I would expect this will happen in few years when the carriers have technology to track it usage across devices and aggregate it.

    And for larger corporate clients we’re still able to negotiate unlimited aircard plans for some clients, it’s an individual case basis (ICB) and it requires some work and a commitment but it can be done.

  2. Idi-amin Palin

    It is outrageous that people have to pay upwards of 90 dollars at the minimum for montly 4G service and these service providers can’t provide decent and consistent good service while they collect billions in revenues. It is shameful act of deceit.

  3. Jennifer

    This is not in their best interest if they want to keep existing customers from leaving and going to Verizon because 3g speeds suck and they have had many outages and network problems over the past 3 months where I live. I will stay until 2013 but when my contract is up I am going to move to Verizon who has much better coverage and stability. I have an EVO 3d and have good 4g coverage where I work but this is the last straw, if I am going to pay all this money I might ad well have reliable coverage and fast data speeds. So long Sprint

  4. I think Sprint should tread very slowly when it comes to charging for features that are currently free. This new charge coming November will certainly give potential Sprint customers second thoughts about joining. They know the writing is on the wall for tiered data charges on smartphone users. This is simply bad marketing and timing on the part of Sprint.

  5. I think Bye answered your question didn’t he? Based on what you stated, Sprint is limited broadband demands from other non smartphone sources so that they can continue to offer unlimited for their smartphones. Bye stated that the unlimited smartphone plans keep them competitive and must be preserved to differentiate them from their competitors. I think your conclusion is a lousy guess and runs contrary to what Bye said. I’d think Sprint would go bankrupt before they would give up such an advantage.

    • Ryan Kim

      I agree it would be a bad to give up the advantage it has but the fact is Sprint has a lot of demands and it’s going to be hard to be the lone hold out in providing unlimited data in smartphones. I hope I’m wrong and i’ll admit it if that’s the case. I’m a Sprint user so I stand to lose if unlimited 4G goes away on my Android.