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Will Sprint's unlimited data plan gain them market share with the release of the iPhone 5?
According to Charles Golvin of Forrester Research, Sprint will now be carrying the soon-to-be-released iPhone 5 as part of its smartphone offerings. Golvin explains that Apple needs to broaden the iPhone's base because of the growth of Google's Android OS-based smartphones, which are already carried by the 4 major mobile carriers in the US. Do you think this will bring Sprint significant market share, given the the cost savings they offer relative to other carriers (eg. Verizon and AT&T?) Or not?
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6 Answers
Sprint has enjoyed the luxury of offering unlimited data for one reason. They have the lowest market share of the three major players. It's simple. Lower number of subscribers on the network equals better overall performance. No one, not even Sprint, knows how their network will react once it gets loaded with all the new iPhone 5 users. I predict that, just like AT&T, there will be an initial offering that includes unlimited data but that option will sunset within a year of the release. I currently have one of those coveted unlimited data plans from AT&T. It cost me more to purchase the device without a contract, but I do have one of the few iPhone 4's with an unlimited data plan. I also own a Blackberry on the Sprint network and all my broadband devices are on the Sprint network. Over the last year or so, I have seem a definite decline in performance, both on the 3G and 4G networks from Sprint. Only time will tell. Also, AT&T is still the only carrier that allows you to browse and talk at the same time. In addition, if you remember, Sprint used to get hammered for their customer service. This is a numbers game as well. Those customers who were really pissed off migrated to other networks. An increase in volume will stress Sprint's ability to effectively service their customers and those concerns will rise to the top again. As I mentioned, I have a Blackberry on the Sprint network and have had it since 2005. I specifically work with two Sprint employees. One based in a tech support center and one in a local store. Every time I try to use the normal channels to get assistance, something goes wrong or my problem doesn't get resolved. That will not float once the numbers go up for Sprint. Fun times ahead!!
Competition is almost always a good thing for consumers. I think Sprint will get an initial slug of business from ATT and Verizon. What folks want is the iPhone and they want the iPhone because it does what they want to do (apps) easily. In the end, the telecoms become competing carriers because Apple broke the hegemony by refusing to allow the telecoms to dictate the device/OS. They don't like that. Historically, the telecoms have controlled both. Soon they will be just the transport layer and they'll have to compete on that basis. We are seeing a repeat of what happened some 50 years ago before the landmark Carterphone legislation. Until then, you couldn't own a phone. You leased it from Western Electric. After Carterphone, consumers were free to buy whatever devices they wanted wherever they wanted and plug them into the jacks in their homes. Apple broke the back of the first telecom by insisting on controlling the device and the OS. Android still suffers telecom "customization" of the OS and that is an Achille's heel. Ultimately, my hope is that Sprint's entry will force the others into more reasonable data plans. The latter are probably going to be one of the major ways the carriers can compete once they are fully divested from the devices/OS. History is repeating itself.
I can say from personal experience that after using the AT&T, T-Mobile, and Sprint data networks in the SF Bay Area, the Sprint data network has been the strongest by far. I've used Blackberry phones on all 3 and the speed & coverage on Sprint are excellent. The fact that unlimited personal usage is reasonably priced, and cheaper than the other 2 is amazing to me as well. While I know there is currently a small additional fee for 4g data plans, it will be interesting to see if Sprint offers the same pricing model for the iPhone as they do for their other smartphone offerings, or if they will create a premium tier for iPhone plans because users typically surf more. I would venture to say this will strengthen Sprint's position regardless because current customers will be excited to have a powerful new toy on their provider's already stellar network, but the level will depend on how they price the plans.
When you look at what made the Iphone Ipad and smart phones poplar, it was access to high bandwidth applications. Listening IP-radio, watching IP TV, and down load movies. Both Verizon and AT&T are going to a limited unlimited data plan.
After they receive their first bills under the new AT&T/Verizon limited data plans, users should be driven to Sprints unlimited/unlimited data plan
The question is can Sprint make a profit catering to these high volume users.
I had Sprint/Nextell for quite a number of years but their big problem here (and most places) is they do not have any coverage in areas unless it is a very populated one. If you have a car accident on vacation and not on the interstate or in a city, you have big problems, you better have another brand service also with you!
As far as Verizon "Ruling the Air", my experience is they have very limited 4G coverage, their phones work great but only as 3G coverage goes.
Back in the 80's we had AT&T "Flip Phones" that you could connect to a craddle in the car that made it a 3 watt instead of a normal .5 watt, I had coverage anywhere in the USA!
Someone should make them all do a little truth in advertising!
Robert McMurry
Customer
My guess is that we will see a pretty sizable flood of people migrate to Sprint at the announcement and release of the iPhone for that carrier. However, once the iPhone begins to cripple their network, they will likely have to renege on that selling point. I am a Sprint customer in Wisconsin and can say that Sprint's network has become noticeably flakier in the past year or so. I can only imagine that an influx in 20-somethings (like myself) looking for a cheap data provider are going to cause Sprint to rethink its pricing structure.
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