Sprint may consider usage-based pricing2010.09.23 09:39 by Daniela
Keywords: Sprint Nextel, 4G, Wireless
Sprint Nextel has not ruled out a usage-based pricing model for its 4G wireless service, CEO Dan Hesse said Wednesday.
Speaking at the Emerging Technology Conference hosted by the Massachusetts Institute of Technology here, Hesse said the company, which offers an unlimited data plan for its 4G wireless service, may eventually need to go to a usage-based or tiered-service model, if data consumption sky rockets. This is an about-face from Sprint's marketing message, which has played-up its unlimited 4G data service as a way to differentiate itself from competitors.
"We can offer unlimited data, as long as usage on the network is reasonable," he said. "But if I have an all-you-can-eat buffet, and the entire New England Patriots football team shows up for dinner, it's going to run me out of business."
Smartphones are driving up wireless data usage on all cell phone networks with some carriers, such as AT&T, seeing usage increase 18 times in fewer than two years. In fact, this fundamental change prompted AT&T earlier this year to eliminate its unlimited-data plan for smartphones. Now the carrier requires new subscribers to sign up for either a $15 plan that offers 200MB, or a $25 that offers 2GB of data per month. Verizon Wireless still offers an unlimited data plan for its smartphones, but the company has indicated that it will likely move to a tiered model based on usage, when it launches its 4G network later this year.
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