Coming to the iPhone party late, Sprint found itself unable to stop subscriber churn customers flocked to AT&T, and more recently, Verizon. Apple was subsequently able to leverage the popularity of the iPhone to extract some favorable terms from Sprint when the nation’s third largest carrier finally did agree to get into the iPhone game.
Specifically, Sprint agreed to pay Apple huge subsidies for the iPhone along with a promise to purchase 30.5 million units regardless of whether or not they’d be able to sell each and every device. When the dust settles, Sprint’s deal with Apple will end up costing them $15 billion over 4 years.
It was a risky move, to be sure, but so far it seems to be paying off. Indeed, just 12 hours after the iPhone 4S launched, Sprint proclaimed that it had already set a one-day sales record for a particular device.
That’s great for Sprint, but it still has to compete with the likes of AT&T and Verizon which already have millions upon millions of iPhone subscribers. So to set itself apart from pack, Sprint is the only carrier which offers new subscribers unlimited data as part of its subscription plan. Indeed, unlimited data forms the basis for most of Sprint’s iPhone advertising.
So when word spread last week that Sprint was throttling the data usage of its top 1% of iPhone users, some folks were naturally incensed at what they called a classic corporate bait and switch. The root of the report came as a result of misinterpreted statements from Sprint CEO Dan Hesse who was speaking at an investor conference this past Thursday.
But not so fast, folks.
News travels at warp speed over the Interweb and Sprint soon came out with a statement clarifying its throttle policies. In short, Sprint does not throttle any iPhone user who makes use of their network. Subsequent reports claimed that Sprint throttles the data usage of users who roam excessively on parter networks, but this too seems to be fals.
Clarifying the matter, Sprint issued the following statement last week:
- Sprint does not throttle any postpaid phone data users for on-network or off-network usage. Sprint is the only national carrier offering smartphone users truly unlimited data with no throttling, metering or overages while on the Sprint network.
- Sprint does have terms and conditions which prohibit certain types of data use that may impair other customers’ usage or harm or interfere with the network. At yesterday’s investor conference, Sprint CEO Dan Hesse was referring to Sprint’s right to terminate service of data abusers who violate Sprint’s terms and conditions. Customers who abuse our network by violating the terms and conditions will be contacted by Sprint in an effort to have the customer change their usage to comply with their subscriber agreement. Customers who do not change their usage and remain in violation of the terms and conditions may be subject to actions reserved by Sprint, including but not limited to termination. Consistent with our advertising, engaging in such uses will not result in throttling for customers on unlimited data-included plans for phones.