Sprint to charge smartphone users a $10 premium for data
Expanding a fee already charged to those on 4G data plans, starting Jan 30 all new smartphone customers would be charged an extra $10 per month. The company says the decision reflects increased costs to provide these more bandwidth-hungry devices with data service.
The change would not affect current customers, who would be grandfathered in under their preexisting plan. In any case, Sprint's decision may also be a side effect of its push for "unlimited" plans last year.
Sprint says that on average, the smartphone customer uses ten times the amount of data as those on standard phones. However even with the charge, Sprint maintains that it is still the best value in wireless overall.
That statement would essentially be true: with the new charge, its unlimited everything plan would now cost $79.99 per month. Similar plans on T-Mobile cost $99.99 monthly, and on Verizon $119.99.
"Sprint wants its customers to experience the range of entertainment and productivity possibilities available with today's wireless technology," consumer business president Bob Johnson said in a statement. "This is responsible, sustainable and reflects our commitment to simplicity and value."
Overall among financial analysts, Sprint's price hike was well received. "Sprint has been the price leader in the market," Wells Fargo analyst Jennifer Fritzsche told BusinessWeek. "Sprint may be more confident in the pricing power it has with customers."
Another possible reason for the surcharge could be a desire by Sprint to prevent having to put bandwidth caps on its plans, and keep them truly unlimited. Verizon is currently investigating its options, while AT&T has tiered plans. T-Mobile does not currently have any caps, but has said it will throttle those who consume a large amount of bandwidth.