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How Unlimited Is "Unlimited" at Sprint?

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We've all heard the longtime battle cry of Sprint Nextel (NYSE: S  ) : Unlimited!

The company still runs a campaign around that theme on its corporate homepage. "Sprint is the only national carrier with truly Unlimited data," it says. "No throttling. No metering. And no overages."

That's the free-range attitude that's supposed to set the company apart from AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) , and to a lesser degree T-Mobile USA. When you're with Sprint, you don't have to worry about bandwidth caps or speed throttling. Those other guys cut you off at a certain limit, charge through the nose for surplus megabytes, or slow you down to a crawl if you eat too much at the data buffet.

That's why customers and investors arched a collective eyebrow at Sprint CEO Dan Hesse last week. Speaking at an industry conference, Hesse said that about 99% of his customers really do have an unlimited experience -- but for the 1% or so who abuse the privilege, "We can knock them off."

Shock! Horror! Who are these nefarious one-percenters and should we stage an Occupy Sprint movement against them?

Before you pack up your sleeping bag and a small tent to head for Sprint's headquarters in Overland Park, Kansas, take a deep breath and think about this statement.

On a second listen, Hesse is only offering unlimited data plans to smartphone customers. Sprint does sell wireless broadband modems for your laptop or WiFi tablet, but those don't come with unlimited data. Instead, the largest helping is a 12 gigabyte plan followed by overage charges of $0.25 per megabyte. Exceed your allotted bandwidth by a mere 320 MB and you'll double your $80 monthly bill.

Company spokesman Bill White clarified further that Sprint might cut you off if, for example, you use your smartphone data plan to run a server farm. Some phones can be hacked to do that kind of thing, and Sprint obviously doesn't like the idea.

"You don't have to worry," says another recent Sprint ad. "Only Sprint offers truly unlimited data." Right -- but that doesn't mean that every Sprint plan is unlimited. This underdog is still different from the big boys -- but maybe not as unique as you thought. Pick your poison with care, Sprint fans, and make sure you read the terms and conditions under a powerful spyglass.

Get more Foolish analysis of the mobile industry under your belt:

Fool contributor Anders Bylund holds no position in any of the companies mentioned. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.

Read/Post Comments (3) | Recommend This Article (5)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 11, 2012, at 4:26 PM, p374376 wrote:

    I have had both Verizon and Sprint and what I know is with Sprint my bill is almost half of what I paid Verizon. As for the unlimited data, I find this to be true. I have a smart phone a enjoy it to its fullest capacity with Sprint without the concern of going over some data limit.

  • Report this Comment On January 11, 2012, at 6:29 PM, lucasmonger wrote:

    I have AT&T for home and Sprint for work and at least in the Champaign, IL area, the data speeds on AT&T far exceeds Sprint at the moment, contrary to the years of bashing AT&T took on the chin since the introduction of the iPhone. Unlimited data on Sprint is useless when the faucet only opens for a stream of drips. Seriously, sometimes I get bytes per second instead of KB or MB. I'm sure it a function of the too many college students at the University of Illinois all carrying and using smartphones bombarding the network.

  • Report this Comment On January 12, 2012, at 8:49 AM, bt3115 wrote:

    "I believe the overage charge are $.05/MB not $.25"...big difference. "the largest helping is a 12 gigabyte plan followed by overage charges of $0.25 per megabyte. Exceed your allotted bandwidth by a mere 320 MB and you'll double your $80 monthly bill."

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