Sprint’s plan to offer free service to students is part of a larger plan, to eventually offer free service to all.
Sprint is in a unique position to offer free-tier service now. Under the SoftBank and Clearwire consolidations, Sprint controls more bandwidth than everyone else… combined. I’m not talking about local loops, I’m talking about wireless spectrum. With 200 MHz to burn through, Sprint finally has the hardware with Network Vision to actually use it.
For the people who want free service, unlocked devices and having service on those magical 850/1900/1700/2100 bands are pretty meaningless. Sure, we care about them over here at PhoneNews.com, because you typically care about them. You want your souped up superphone to run on AT&T, T-Mobile, and Verizon just as fast as one-another. But Sprint doesn’t have to worry about WiMAX anymore, and they certainly don’t have to work on iDEN. They can ship a device that taps into multiple 800 MHz tiers, 2.5 GHz, and still tap the standard 850/1900 frequencies.
It’s not hard to get device makers to hop onboard with supporting a couple extra bands, it was a pain in the antennas to support WiMAX when LTE got traction.
So Sprint now has the spectrum to offer free service. They don’t have the rebanding or the coverage quite done yet. The local loops aren’t strong enough to offer it to everyone… yet. You won’t see national TV ads plugging this stuff for a year or two. Right now, students, and the tech savvy, are the only ones offered in.
The limiting factor for students? You have to pay full retail for a high-end device, which will cost as much as a year’s worth of prepaid service to begin with. If you were in the market for a Nexus 5 anyways though, that’s not as big of a deal… it’s supported on the students-only plan, and yes, that includes $349 out-the-door units sold direct from Google Play.
And, if you weren’t aware, you count if you can read this. Go grab your ancient CDMA Sprint phone collecting dust, or your LTE-enabled Nexus 5 (yes, Sprint fixed that grave misstep, more on that in a few), and head on over to FreedomPop BYOD. Register your phone, and watch it activate. You now have 500 MB of free data, 200 free minutes, and 500 free messages each month.
The Sprint plan for students that is rolling out is more lucrative, offering more airtime, more data, and an option to upgrade to unlimited data for $10/month. That magical $10 mark reminds me of when PCS Vision realigned to unlimited all-you-can eat data for $10, and I started a little Sprint blog (before that was a word) over a decade ago talking about it.
What’s coming though is a future where Sprint is going to offer this to all. Every Sprint device that has full Network Vision (full 800 MHz and 2.5 GHz) support and VoLTE, will likely be sold as a prepaid device. They’ll all offer a base amount of minimal VoLTE voice minutes and LTE data. It won’t be a lot, but it will be in-line with today’s FreedomPop numbers, or maybe even a bit more.
How will Sprint make money? All the add-on services that will be cheap. Want to watch LTE Broadcast television on your phone? That’ll be $5. Want to group a prepaid tablet, prepaid phone, and prepaid gaming console’s data bucket and services? (Shameless plug – we aren’t working with Sprint over on Team iConsole… currently). There’ll be a prepaid plan for that, much more in-line with what Ting does today, sans the per-month per-device fee. Speaking of which, if Ting wanted to really engage tech-savvy customers, getting rid of that per-month device fee would really gain traction, as geeks love free backup devices and will pay for the privilege.
If this sounds a lot like T-Mobile’s unCarrier plans, it’s close, but without the entry fee. With unCarrier, you have to pay a monthly plan, even if you don’t use devices much at all. Sprint is already (via its MVNOs), driving the entry point per month down to zero. And, additionally, that process has started with Sprint plans too.
Case in point. Sprint offered this month a Galaxy Tab 3 for $50, out the door, on a 5 MB data plan that cost $5 per month. We thought it was gaming the system at first, we weren’t sure it was ethical. It was, albeit very briefly, a Galaxy Tab 3 7.0 with 4G LTE, for less than the Wi-Fi version, and that includes two years of service fees!
Sprint’s profit model on the Galaxy Tab deal, is that people will either go over the paltry 5 MB and pay (hefty) overage fees, or (if they’re smart) will call customer service and change plans when they need to use 4G LTE in a pinch. The 5 MB plan is designed for consumers that know how to turn mobile data on and off. It’s as much of a game-changer, as the Neuxs 7’s ability to use AT&T, T-Mobile, and Verizon’s 4G LTE networks simultaneously.
Oh, and by the way, Sprint has continued that deal… so go grab one if you want a new tablet.
In the end, like I said, Sprint has the technology ducks in a row to do this. The question is if they will profit or not. I think the strategy is rather low-risk. With the spectrum deployed, Sprint can handle the free riders. With VoLTE, they don’t even need CDMA to do it, and can eventually reband all that coverage to LTE. As LTE devices get cheaper, a VoLTE feature phone could run a bill of materials for as low as $20. It’s not hard to send those out to existing customers that are happy with what they have today.