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. icon
    jsf (profile), 16 Jul 2010 @ 8:01am

    I don't have a problem with there being caps on data plans. What I don't like is that they lie about plans being unlimited that do have caps, the fact that they change a plan sold as unlimited to capped and that they charge ridiculous prices for smaller cap levels.

    If they want to cap things then cap them and admit it up front. If they want to charge by the byte then do that but don't make me pay 8 times more per byte because I only want to have a small plan.

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