Sprint Realizing That Data Caps Turn Customers Off

from the about-time dept

Back when Sprint joined other mobile carriers in issuing a 5 GB limit on its EVDO connection, I was among those who noted that it was disappointing that the company sold me an "unlimited" service, and then changed the terms on me unilaterally. It also changed the way I used my EVDO card, making it significantly less useful and valuable for me. I don't want to be thinking about how much data I'm using (and it was especially difficult without a detailed system of tracking how much data you were using). I remember once, while traveling, I accidentally left the EVDO connection running over night, and got worried that Sprint might cut me off. It's just not worth it, and I've actually been thinking about dumping Sprint once my contract is up.

Apparently, I wasn't alone in thinking this and Sprint has noticed. With its new WiMax network, it has stayed away from talking about any caps, and has now admitted that the reaction to the EVDO caps is part of the reason why. They're afraid that, just as they're trying to convince people to use the WiMax network, they'll get scared off by caps. The problem, of course, is that these mobile broadband providers are fighting against themselves on these things. They want to convince the world that these networks are useful -- and to do that, you have to show all the cool things that you can do with them. But, if they haven't really invested enough in the networks, they can actually run into some congestion problems, and so they can't encourage you to use them too much. Hopefully, the investment into WiMax (or, potentially moving on to LTE) will mean that such congestion problems are mostly a thing of the past, and that it's not worth implementing caps.

That said, Sprint's admission of how people responded to the EVDO caps should be a clear warning to ISPs that keep trying to implement broadband caps or metered broadband. Doing so imposes additional costs that you might not have considered, such as the mental transaction costs your users face in determining if it's even worth using your network. Of course, ISPs should know this already. We already have a detailed case study in that AOL only really took off after it switched from hourly billing to an unlimited flat-rate. Why some ISPs want to go back to make their product less valuable is beyond me.

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  1. identicon
    out_of_the_blue, 16 Jul 2010 @ 3:56am

    Mike again wanting "unlimited" for a fixed price. -- Or not.

    This time it's mere data, and you recognize that no system can actually handle unlimited use: "But, if they haven't really invested enough in the networks, they can actually run into some congestion problems, and so they can't encourage you to use them too much." -- The qualifier only matters if there's enough profit to *make* the needed capacity increase, and it's still likely to be a constant race.

    What you're saying -- that's an idiomatic expression meaning "an interpretation of extended implications of existing statements" -- is that Sprint has simply decided to lie, because if everyone tries to use "unlimited" service, the system will collapse. -- Exactly as a subway system would if too many people decide to utilize it on an "unlimited" basis.

    As a business practice, I've no objection to advertising "unlimited" service so long as it *can* be true for a *tiny* portion of users. That benefits heavy users without extensive bookkeeping for anyone. But if at some point, as evidently occurred previously, service must be limited by practical concerns, it's not false advertising to have stated "unlimited".

    And it's certain that Sprint will do so *again* if this new service is popular enough. -- And then what's the point of this piece? You seem to be on both sides of this with "ISPs must avoid caps", but then admit that network capacity *is* limited. -- So I take your point to be that companies *should* lie to induce users into a limited system, skim the profits, then change to practical terms, and repeat. You can then write *another* piece railing about how an "unlimited" service actually has a limit. That seems... weird, but guess that's tech journalism.

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