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Speaking at the EmTech conference at MIT in Cambridge, Mass., today, Hesse said he felt confident that Sprint and Clearwire had a strong enough spectrum portfolio to handle the expected surge in data traffic from 4G users. He also said that the company could keep its plans unlimited by charging more if it eventually found that customers were consuming more data than the carrier could handle.
"We can offer unlimited service as long as the usage is reasonable," he said. "We know users will use lot more data, so we charge our customers $10 more per month on 4G phone. So it's unlimited but we charge more for that service."
Hesse said there were rare circumstances where service would not be unlimited but that those circumstances were limited to less than 1% of users who consumed unusually large amounts of data on a monthly basis. In those cases, Hesse said the company would work out a deal with those users to pay more per month for 4G service or would tell the user they would be cut off after they consumed a certain amount of data. But overall Hesse expected that the vast majority of users would not come close to approaching this threshold.
"At Sprint we're trying to use our resources as efficiently as possible," he said. "But if you have certain [data] hogs you can ratchet them down as much as possible."
While Hesse would not completely rule out implementing tiered 4G services sometime in the future, he said the company was not looking at it right now and that having a metered service might degrade user experience.
The wireless industry has recently started moving away from all-you-can-eat wireless data plans and toward tiered service plans. AT&T got the ball rolling earlier this year when they announced they were dropping unlimited data plans for the iPhone in favor of plans that offered between 200MB and 2GB of data consumption per month. Verizon shortly followed suit by saying it would implement a similar pricing scheme for its 4G LTE services that are due to launch later this year. Verizon COO Lowell McAdam hinted earlier this year that LTE plans would give users a certain amount of data they could consume every month before they would have to pay overage fees.
Earlier this year Sprint 4G Vice President Todd Rowley explained that Sprint would be reluctant to implement 4G data caps after it experimented with 5GB data caps on its 3G EV-DO Rev. A network. Rowley said that the company found many customers becoming worried about using data after implementing the cap, meaning there was less consumption of data on the network overall.
Sprint and its partners at Clearwire have been launching commercial WiMAX services in major markets in the United States over the past year. By the end of the year they will have built out a WiMAX network that spans all major U.S. markets and that covers 120 million points of presence.
Read more about wireless & mobile in Network World's Wireless & Mobile section.