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Sprint: Unlimited still means unlimited

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Sprint CEO Dan Hesse

Updated. Sprint(s S) is walking back comments from CEO Dan Hesse on Thursday about Sprint ‘throttling’ data speeds of its heaviest data users even though they subscribe to unlimited plans. At a Citigroup (s C) conference on Thursday, Hesse clearly stated Sprint was reining in bandwidth for its greediest smartphone customers, who Hesse described as abusing the network. But Sprint executive Bill White told Cnet (s cbs) Hesse was referring only to roaming customers off of Sprint’s primary networks – a policy that has been in place for some time. For any smartphone on Sprint’s 3G or 4G networks, unlimited still means unlimited, White said.

Like all operators, Sprint doesn’t run networks everywhere it offers service. It contracts out with dozens of smaller regional carriers to provide coverage in smaller towns and rural highways, allowing it to focus on cities and major traffic corridors. Those roaming agreements aren’t free, though. Sprint has to pay those operators for every MB its customers consume, leading it to cap data out-of-network at 300 MB per month. Sprint also places caps and use restrictions on its data modem plans, hotspot features in smartphones, and on its Virgin Mobile and Boost Mobile prepaid services. Sprint, however, has kept its smartphone unlimited plans restriction-free because of the competitive advantage they give it over its competitors, all of whom cap or throttle data.

Unlimited staying unlimited has to be a relief to Sprint’s customers, many of whom gravitated to the operator precisely because it’s the only major carrier to offer data plans restriction-free. The question is how long Sprint can maintain that policy. Darrell just wrote about how the iPhone(s aapl) 4S is slurping up two to three times the data of its predecessors. Sprint just landed the iconic device, which is sure to flood to its 3G network with tons of new traffic.

And if Sprint is concerned about data abuse, then it has the worst policy imaginable to combat it. The most heavy-handed smartphone customers who found their data use curtailed or capped by AT&T(s T) and Verizon Wireless (s VZ)(s VOD) will likely migrate to Sprint where they face no restrictions on consuming 20, 30 even 100 GB of data a month. The only thing preventing a mass exodus are the limitations of Sprint networks. The iPhone has to cope with Sprint’s slower EV-DO 3G network. Meanwhile, its 4G WiMAX network is fast, but it only covers a third of the country.

Update: Sprint issued a statement on its blog claiming Hesse wasn’t referring to throttling customers when he spoke of managing abusive data users, but rather booting those customers off its network. Here’s the text:

Sprint does not throttle any postpaid phone data users for on-network or off-network usage. Sprint is the only national carrier offering smartphone users truly unlimited data with no throttling, metering or overages while on the Sprint network.

Sprint does have terms and conditions which prohibit certain types of data use that may impair other customers’ usage or harm or interfere with the network. At yesterday’s investor conference, Sprint CEO Dan Hesse was referring to Sprint’s right to terminate service of data abusers who violate Sprint’s terms and conditions. Customers who abuse our network by violating the terms and conditions will be contacted by Sprint in an effort to have the customer change their usage to comply with their subscriber agreement. Customers who do not change their usage and remain in violation of the terms and conditions may be subject to actions reserved by Sprint, including but not limited to termination. Consistent with our advertising, engaging in such uses will not result in throttling for customers on unlimited data-included plans for phones.

Termination is most certainly different from throttling, but in his speech, Hesse said 98 to 99 percent of its customers would be unaffected by such policies. Hopefully, Hesse was just speaking figuratively rather than literally. If Sprint is considering suspending 1 to 2 percent of its subscriber base over their data usage, then it will have a much bigger customer relations nightmare than if it was dealing with mere throttling.

16 Responses to “Sprint: Unlimited still means unlimited”

  1. cmcollins001

    For Sprint to say it has a roaming data cap of 300mb in it’s terms of service or in some blog is one thing, but notice when you check your data usage under your view usage on the website, it will say that you have unlimited remaining of your roaming data. This is complete misrepresentation. It’s been that way for years, there have been several complaints and it’s still says unlimited remaining. Now, if I go to monitor my data and I see unlimited remaining, I’m not going to go forward and look at the terms of service just to make sure that’s what it really means. If you have a tablet or a data card in your netbook, it clearly shows you have x amount remaining, so they have the ability to correctly display this on a phone line, but they don’t. They have to keep up the appearances of “truly unlimited” until you’re one of the 1%-2% being kicked off. I’ve been going over 300mb for years and just now they’re throwing a fit, and yet not one person can tell me, out of the 13 people I have corresponded with, why the website shows under my account that I have unlimited data roaming available. I’m going to keep pressing until someone can honestly tell me why.

  2. I would not want to see a company go out of business because they took me on as a customer. I run a business and once or twice during my thirty years doing so I had to explain to a customer that I made a mistake in pricing. I asked for a price adjustment or that we end the contract. However, I would never have dreamed of charging them an “early termination fee” because I could not meet my promised obligations. Nor would I start to charge them a higher price surreptitiously by putting a notice on the back page of their bill. I would at least call them or send an e-mail. Of course, I used my 10G of data doing all the things they advertised about such as watching movies or using Skype telephone or Pandora Music.
    Anyway, go ahead and buy the telephones and sign up for data plans. Be aware though, Sprint may change the terms of your contract if they choose, and make you pay an early termination fee is you don’t like it.

  3. John B.

    I have been hearing all the negative comments given in respect to the “Unlimited’ definition by carriers such as in Sprint’s case.

    I think Sprint has been fairly straight forward in what is covered or not covered under this terminology.

    I would like to give a quick comparison in what is acceptable or not.

    I am a very large proponent of unlimited. I love knowing there is a cushion to protect me when I “occasionally” become web addictive. While this is rare, it is piece of mind. I use it only as insurance. I like retaining the stability of the offer.

    Now take the scenerio where a large family consistantly visits an All-You-Can-Eat Buffet. What good is this buffet if the large family consistantly consumes so much food that there is never enough for the rest of us? How many times do we have to fight to get to a desired item only to find it is gone within minutes by the same family shortly after it being replenished?

    They’re inconsiderate and abuse the unlimited feature. I have a notion that most complaining about the unlimited definition given here by the carriers, are in fact selfish and and have no respect for the limitations that indeed are relevant in any instance of life.

    John B.

    • This is not a communist country. I pay for unlimited, I want unlimited. If you don’t mean unlimited, don’t say unlimited.

      It’s not my job to care about the other customers at the buffet, its the restaurant’s job. If they find themselves unable to accomodate their end of the
      bargain, they should not have sold all you can eat.

  4. It is not unlimited. I am sorry, this is not accurate reporting. Midway through a “contract” (in my case twelve months through a two-year contract for a 3G4G modem), they significantly raised the price, and then charged an “early termination fee” when I left to avoid the higher charges. Upon reading the “fine print” I realized they can change the terms at will. Of course they do this after you have purchased the equipment and set up the modem. Did I mention they placed the price increase notice on the back of the second page of the monthly bill where it was sure to be missed? Knowing this may prompt customer complaints and class action suits, they place a clause in your contract limiting or annihilating your rights to appeal their decision. Don’t believe me? Log in and read the customer complaints at the Sprint web site. Sorry, I personally experienced the rate increase, a bill for overages and a termination charge when I left.

  5. Hesse can talk up anything, but the fact is Sprint DID IN FACT eliminated unlimited for mobile hotspot users – these are exactly the devices that benefit most from having an unlimited data feed, especially when that connection is shared with multiple users.

    It’s fortunate that Clear can still bring the cavalry to save unlimited fans. They are the only U.S. carrier today to offer speed-based 4G pricing, and that for me works.

    • Kevin Fitchard

      Hi Luscious, I think that’s exactly why the eliminated them. A hotspot can drain many times the data load of a smartphone. It may not seem like a very popular sentiment, but I think Sprint is really trying to keep unlimited in some form for smartphones, even if it is just as a competitive differentiator. But with average data consumption skyrocketing, I don’t think they’ll be able to keep it up for too much longer.

  6. Mosaic Technology

    This is a great position for Sprint to be in right now. I’m sure many Verizon and AT&T customers are dissatisfied about losing their unlimited plans and will consider making the switch to Sprint. Sprint, being the only unlimited carrier right now might have extra challenges, but it has given itself a strong advantage.

  7. William Diaz ✔

    When I purchase something that says “Unlimited” that means, without limits in place of the product I buy. That means, without limits to speed, amount of data consumed, time of day, how the data is consumed, where it is consumed, PERIOD!

    To say anything contrary to “Unlimited” would mean “With Limits” meaning, false advertising, and breach of contract on Sprints part, thus, ETF waivers for everyone.

    • Kevin Fitchard

      Hi William,

      I see your point, but I think it would be unreasonable to expect any operator to offer unlimited anything when roaming. Most of the operators Sprint partners with don’t even offer unlimited plans of there own.

    • Stephen M

      Actually, sir(william), you are wrong. If you read the Sprint Terms and Conditions it states in it clearly, you are limited to 300MB of off network(roaming) usage. So there is no breach, you agreed to it when you signed up.

      • William Diaz ✔

        Stephen and Kevin,
        Actually it didnt state that in the Terms and Conditions in the contract of the year I renewed that there is a 300MB roaming limit, and online it explicitly shows “Sprint 3G Roaming Data” and shows “Unlimited”. So yes, there would be a breach of contract, based on exactly what I agreed to and signed and what they offer me in my plan, if they even so attempted to impose any 300MB limit. I dont think its unreasonable to ask Sprint to uphold their contract terms, even if they are not profitable, or favorable to Sprint, due to the fact this is what they offered at the time I renewed. Times may have changed, and they are welcome to terminate my service, or impose limits, but I am also free to having my ETF waived, which would be fine by me.

  8. physical0

    Unlimited is like “All you can eat”. Throttling data is like going to a buffet and getting your jaw broken by your waiter so you have to eat with a straw.