Sprint Wants to Make a Lifer Out of You

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

With the combination of SoftBank, Sprint (NYSE: S  ) , and Clearwire now complete, the No. 3 domestic carrier is cementing its strategic position with consumers. The company has been aggressively pitching its unlimited data plans over the past few years as a key point of differentiation from its rivals. Sprint is now guaranteeing its new unlimited data plans for life, hoping you stick around for the long haul.

CEO Dan Hesse notes, " While other wireless providers are moving away from unlimited service, Sprint champions it." The unlimited guarantee extends through the life of the line of service. The rate isn't guaranteed, so Sprint could change pricing in the future.

Larger carriers AT&T and Verizon Wireless have already switched to tiered pricing for data plans, while smaller "Un-carrier" T-Mobile offers unlimited data but throttles data back to 2G speeds after a certain threshold. Truly unlimited data on the magenta carrier costs quite a bit extra.

Sprint's big bet on unlimited data isn't without downsides. Mobile data usage continues to skyrocket to unprecedented levels. Strategy Analytics estimates that worldwide smartphone data usage will jump from 5.3 exabytes last year to over 21.5 exabytes in 2017. For reference, 1 exabyte is over 1 billion gigabytes.

That precipitous rise will put a strain on global networks, and carriers will need to beef up capacity along the way. That's precisely why most carriers have tried to transition to tiered pricing -- in order to foot the bill for those costly infrastructure investments. Rising mobile data usage is also an opportunity for revenue upside for carriers with tiered pricing. By sticking with unlimited, Sprint's primary way of growing average revenue per user will be just simply raising rates.

Since the guarantee is valid for new and existing lines of service right now, it could still potentially shift away from unlimited data plans eventually and just leave grandfathered all-you-can-eat customers.

Want to get in on the smartphone phenomenon? Truth be told, one company sits at the crossroads of smartphone technology as we know it. It's not your typical household name, either. In fact, you've probably never even heard of it! But it stands to reap massive profits NO MATTER WHO ultimately wins the smartphone war. To find out what it is, click here to access The Motley Fool's latest free report: "One Stock You Must Buy Before the iPhone-Android War Escalates Any Further..."

Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

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.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2534698, ~/Articles/ArticleHandler.aspx, 9/28/2016 11:23:43 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 hour ago Sponsored by:
DOW 18,339.24 110.94 0.61%
S&P 500 2,171.37 11.44 0.53%
NASD 5,318.55 12.84 0.24%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 4:02 PM
S $6.78 Up +0.05 +0.74%
Sprint CAPS Rating: **
CLWR.DL $0.00 Down +0.00 +0.00%
Clearwire Corp CAPS Rating: **
T $40.85 Down -0.61 -1.47%
AT and T CAPS Rating: ****
TMUS $46.81 Down -0.09 -0.19%
T-Mobile US CAPS Rating: ***
VZ $52.06 Down -0.43 -0.82%
Verizon Communicat… CAPS Rating: ****