Unlimited data plans, propaganda and the art of brinkmanship

Written by on March 17, 2017 in Guest Blog with 0 Comments

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Sprint’s CFO says the unlimited wars on data is not sustainable. Now that all four major U.S. carriers are offering unlimited data plans, and the unlimited wars are truly underway, who will be the first to fold? According to Sprint CFO Tarek Robbiati, providing unlimited data at current prices cannot continue.

Being CFO means that Robbiati is concerned with how Sprint is spending its money (and money coming from parent company SoftBank). He says that unlimited data requires more capital expenditures to make sure that an operator’s network can handle the increased capacity coming from unlimited subscribers.

Sprint is said to have a fairly large inventory of spectrum. This means that the nation’s fourth largest carrier can lay in some additional cellular capacity at a lower cost than its rivals, giving them a huge advantage. Speaking about the industry as a whole, Robbiati says that eventually we will have to see price hikes for unlimited plans.

Yet, the carriers don’t seem to want to stop offering unlimited again, because it is obvious at this point that it is what consumers want. Even Verizon, whose CFO Fran Shammo tried to tell Big Red customers that they didn’t need unlimited, had to join the party.

Unlimited wars déjà vu?

This isn’t our first rodeo as they say.  Back in the day (2013), Verizon chief Lowell McAdam said Unlimited data plans just aren’t sustainable – just after Verizon dumps their unlimited plans in 2012. “With unlimited, it’s the physics that breaks it,” he said. “If you allow unlimited usage, you just run out of gas.” McAdam told investors. He also said “We never have and never will lead on price,” he said, adding he doesn’t believe that the recent moves by the smaller carriers will spark unlimited wars on pricing.

Hmmm…  the more things change the more they stay the same?  What goes around comes around?

More here phonearena and here cnet

This article was first published on PricingDataPlans.

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Jonathon Gordon

About the Author

About the Author: Jonathon has been lurking around the Telecoms and Internet space for the last 20 years. He is now a man on a mission – that being the reformation of the Industry Analyst business. He is working with his co-conspirators on transforming the Industry Analyst world forever as an Expert with EMI. .

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