Sprint raises prices on postpaid data
Sprint will begin charging its smartphone customers $10 more for data to help offset the "exponential growth" of mobile data traffic, the company announced today.
The price hike goes into effect for new postpaid smartphone customers beginning Jan. 30 and will not apply to existing Sprint customers until they upgrade or get a new smartphone.
Bob Johnson, president of Sprint's consumer business, defended the price increase in a statement. "Sprint's unlimited data plans, with or without the $10 charge, continue to beat the offerings of our top national competitors," he said.
According to estimates provided by Sprint, the average smartphone customer uses 10 times more data than users of feature phones.
The move marks an expansion of Sprint's earlier move to add a $10 data use fee to the service plans for its WiMAX-capable smartphones, the HTC Evo, the HTC Evo Shift and the Samsung Epic. The charge will now be applied to Sprint's WiMAX smartphone lineup and its BlackBerry, Android, Windows Mobile, Palm and Instinct devices.
Sprint's announcement included a defense from Recon Analytics founder and former Nielsen vice president Roger Entner, who said that the increase in prices reflected the rising cost of supporting customer's data usage.
"Building, maintaining and expanding wireless data networks isn't free – there are real costs involved," Entner said. "In effect, Sprint has chosen to increase the price of its unlimited Everything Data plans, which is still below that of its major competitors, for the segment of customers – smartphone users – who are using wireless data the most and are driving up costs."
The new data charges come two weeks after Sprint CEO Dan Hesse told an investor conference that the company was considering raising prices to compensate for rising data consumption.
"We're leaning toward making some adjustments upwards, not across the board – only in certain areas," he said at that time. "Usage is increasing at such a rapid rate, something's got to give. From a pricing point of view, the tendency will be to move those up."