Last week I told you that Sprint was limiting customers with "simply everything" to 5GB of data usage per month, plus 300MB per month of off-network data roaming. While quite a few readers have complained about the cap, it's only fair to acknowledge a couple of points. By anyone's measure 5GB is a lot of data, and it's doubtful that all but a very small handful of people would even even reach that limit. Yes, it's really the principal that matters here--unlimited should mean just that--but Sprint is not the only carrier to limit data usage.
I contacted Sprint for comment last week. Most importantly, I learned that the Simply Unlimited plan is not affected by the data usage cap, which applies only to connection card and phone-as-modem plans. Here's what else the carrier has to say about the new policy.
- The vast majority of current users (about 99.5 percent) shouldn't be affected. Whether it's the 300MB roaming limit or the 5GB limit on total data usage, that's enough data to meet the regular monthly usage habits of almost all of our customers.
- Going over either limit will not cause a card to suddenly stop working.
- Going over once in a while is OK. We'll check usage using a rolling, three-month basis.
- Customers would have to exceed the limit in two out of three consecutive months to face termination.
- Initially, we are contacting customers first, to make them aware of the new limits and give them a chance to change their usage, if they want to continue using the service.
- We're investigating additional options for customers who need to use more data.
- Users will be able to check and monitor their total data usage on Sprint.com beginning June 8.
- The caps are being applied to new and existing consumer and individual-liable accounts, but not corporate-liable, business contracts, Public Sector, or government contracts. We're working on additional processes and pricing to appropriately address the needs of heavy roaming and data users among the corporate liable customer group.
So what do you think? Are the caps still unfair?
When is unlimited not unlimited? Apparently when it comes from Sprint. Though the carrier has been very active about touting its new "simply everything" plan, which includes unlimited mobile Internet and messaging, it plans to place a cap on monthly data usage next month. Sprint will limit its simply everything customers to 5GB of data usage per month, plus 300MB per month for off-network data roaming.
A Sprint representative told BetaNews that the cap is needed to ensure a great customer experience. "The use of voice and data roaming by a small minority of customers is generating a disproportionately large level of operating expense for the company," the representative said. "This limit is well within the range of what a typical customer would normally use each month." I asked Sprint for further comment and I'll let you know what the carrier says.
BetaNews said Sprint began notifying customers in monthly bills that were mailed this week. The change will go into effect 30 days after customers receive the note. Also, the carrier said it will call customers next month to make sure they're aware of the changes.
Sprint Nextel upped the ante in the $99.99 all-you-can-eat rate plan battle Thursday by introducing a service that includes unlimited voice as well as unlimited data and slew of premium services.
Called "Simply Everything," the plan will give customers unlimited voice as well as unlimited data, text, e-mail, Web-surfing, Sprint TV, Sprint Music, GPS Navigation, and push-to-talk service for $99.99 a month. The company made the announcement during its fourth-quarter earnings call, in which the company also announced heavy financial and customer losses.
The new pricing plan is available to existing and new customers on both Sprint's CDMA network as well as its Nextel iDEN network starting on Friday. Current customers will not have to renew or extend their contract to switch to the service.
Sprint is also offering discounts for families subscribing to the high-end rate plan. Families will get a discount of $5 per month on every "Simply Everything" service that is added to the same bill for up to five additional lines. This means that two lines would cost $194.98 (or $99.99 plus $94.99). A third line would cost an additional $89.99.
Sprint is facing stiff competition. Last week, Verizon Wireless was the first to announce a $99.99 unlimited voice plan followed by AT&T and T-Mobile. Until Sprint's plan was announced, T-Mobile seemed to offer the most comprehensive offering--a $99.99 plan that includes voice, unlimited text messaging and picture messaging.
AT&T's plan is only for unlimited voice calls. AT&T customers can get additional messaging plans starting at $5 more a month with an unlimited messaging plan costing an additional $35 a month on standard phones.
Verizon's $99.99 plan includes unlimited voice and Internet access, and Web-based email. Customers can tack on additional services for a fee. For example, for $119.99-per-month, Verizon Wireless customers can get unlimited messaging. And for $139.99-per-month, they can get VCast video, VZ Navigator, and Mobile E-mail functions.
Clearly Sprint's offering offers customers the most bang for the buck. But some analysts have warned that if Sprint significantly undercut or added more services to the bundle for the same price that they could start a price war in wireless.
Dan Hesse, the company's CEO who took over the top spot at Sprint just before the end of 2007, said the new rate plan is not about matching competitors on price. Instead, he said, it's about making it simpler for customers to buy and use data services. And he hopes it will help differentiate Sprint from its competitors.
"The new battleground will be around data," he said during the earnings call on Thursday. "We want to put a flag in the ground that we are about data."
He also went on to say that the company has a long road ahead of it as it tries to put its failing business back on track.
" I want to emphasize that this is not a silver bullet," he said. "This ($99.99 pricing offer) is one of many actions we will take to turn things around for the company."
Indeed, Sprint has been suffering from massive customer defections as dissatisfied customers flee due to poor network performance and unhappiness with customer service. In the fourth quarter of 2007, Sprint lost 683,000 customers. And it expects more losses in 2008. It forecast that it would lose an additional 1.2 million customers who pay monthly bills in the first quarter of 2008. And the losses will continue in the second quarter, Hesse said.
"The major objective for us is to reduce churn by improving the customer experience across all touch points," he said. "That is the No. 1, 2, and 3 things we need to focus on."- prev
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