Sorry!! The article you are trying to read is not available now.

Sprint: We Don't Throttle Users, We Punt Them

Print comment Post Comments

The hearts of 53 million subscribers under Sprint's (S) wing skipped a beat yesterday. According to a report by Dow Jones Newswires, the carrier whose ads distance itself from Verizon (VZ) and AT&T (T) by promoting unlimited data plans actually throttled the speeds of the top one percent of its heaviest users. Topping it all off, CEO Dan Hesse was quoted as saying that the network will boot any user who refuses to limit his data consumption.

"For those that want to abuse it, we can knock them off," he said.

But before millions of iPhone (AAPL) and Android (GOOG) users flee the struggling provider for other options, Sprint quickly, clarified...the situation to its users on the company's official blog.

Reports that Sprint throttles the top one percent of data users are false. Here are the facts:

  • Sprint does not throttle any postpaid phone data users for on-network or off-network usage. Sprint is the only national carrier offering smartphone users truly unlimited data with no throttling, metering or overages while on the Sprint network.
  • Sprint does have terms and conditions which prohibit certain types of data use that may impair other customers' usage or harm or interfere with the network. At yesterday's investor conference, Sprint CEO Dan Hesse was referring to Sprint's right to terminate service of data abusers who violate Sprint's terms and conditions. Customers who abuse our network by violating the terms and conditions will be contacted by Sprint in an effort to have the customer change their usage to comply with their subscriber agreement. Customers who do not change their usage and remain in violation of the terms and conditions may be subject to actions reserved by Sprint, including but not limited to termination. Consistent with our advertising, engaging in such uses will not result in throttling for customers on unlimited data-included plans for phones.

You'll notice that Sprint's denial of throttling postpaid users doesn't affect its flirtation with throttling prepaid users under its Virgin Mobile brand -- a move it decided to hold off on back in September.

But this shakeup at Sprint coincides with a recent report by the New York Times claiming that the top one percent of mobile users consume half of the world's bandwidth. Arieso -- the British company which came to these numbers -- also alleged that Siri was responsible for iPhone 4S users to consumer double the data as iPhone 4 users.

Though the actual culprit of iPhone 4S users' data consumption is contested, if Sprint's worried about an overloaded network, it may soon join the likes of Verizon and AT&T, and completely ditch unlimited data plans, too.

(See also: Is Apple's Siri an iPhone Data Hog? and Apple Will Become "Uncool" in 2012, Predicts Analyst)

For an investment angle on these and many more tech stocks, take a FREE trial to the TechStrat Report by Sean Udall.
POSITION:  No positions in stocks mentioned.