Souder compares Sprint’s business to that of a pizzeria that offers an all-you-can-eat lunch. “If I come in and eat eight pieces, that needs to be balanced by my sister coming and eating at the salad bar,’’ he says.
Three years ago, Sprint introduced its “Simply Everything’’ plan for $99.99 - covering, within the United States, unlimited voice calls, data, and text messages. “When we launched, we had a lot of trepidation,’’ Souder says, “but we were pleasantly surprised with the number of relatively light users who were willing to pay more for this plan.’’
If Sprint Nextel’s financial results were showing a nicely profitable business, humming in the shadows of its much bigger rivals, Verizon Wireless and AT&T Inc., customers who hate meters could rejoice.
Unfortunately, the company has not posted an annual profit since 2006. Souder says the unlimited plans have not contributed to the losses, saying Sprint has had four consecutive quarters of growth in average revenue per user and has reversed a trend of losing customers.
Sprint has been monitoring use patterns and costs, and in January it increased the price of “Everything’’ plans for newly activated smartphones by $10 a month. The move has helped the company keep its business on a healthy, sustainable foundation, Souder says.
Sprint is behaving more like some carriers across the Atlantic. Smaller operators in Europe “tend to be more aggressive in pricing strategies’’ and are using unlimited data plans to differentiate their offerings from larger rivals, says Thomas Tschentscher, a partner at the international law firm Freshfields Bruckhaus Deringer who specializes in telecommunications.
In the United States, T-Mobile sells “unlimited’’ plans, too, but it throttles back the download speeds when data use passes a certain threshold each month.
Tschentscher says that in Europe, data throttling is all but absent. “Because of the interoperability of the handsets, customers in Europe can easily switch carriers,’’ he says. “So it would be a competitive disadvantage for a carrier to impose throttling down if the others don’t.’’
