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
    nasch (profile), 17 Jul 2010 @ 6:25pm

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

    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".

    If service must be charged for, it's not false advertising to have stated "free".

    If a product is highly toxic under certain circumstances, it's not false advertising to have stated "safe".

    If it's necessary to add some fat to the product, it's not false advertising to have stated "fat free".

    if everyone tries to use "unlimited" service, the system will collapse.

    There's a difference between unlimited usage and infinite usage. Unlimited means I can use it as much as I want. That usage will always be finite. Infinite usage would be downloading an infinite amount of data all the time. Clearly all customers can use unlimited service and it works fine. My ISP has unlimited internet access, as do most others. No caps, no throttling. All the customers have this deal, and the network works just fine almost 100% of the time.

    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.

    That's a really bizzarre interpretation. I took it as providers should invest in their networks so they can offer unlimited access, which is what customers really want. Almost the opposite of what you said.

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