Sprint on Thursday officially announced what had been the source of speculation: the third-largest U.S. wireless provider will offer unlimited data pricing plans on Apples iPhone.
Overland Park, Kan.-based Sprint will sell the iPhone 4 with the iOS 5 software and Apples newest iPhone, the iPhone 4S.
Beginning today, the iPhone 4 (8GB model) with iOS 5 is available for $99.99 through sprint.com/iphone, subject to a new-line activation or eligible upgrade and two-year contract. Sprint said new and existing customers can pre-order the iPhone 4S beginning tomorrow at 12:01 AM PST, and the carrier will begin selling the smartphone on Friday, Oct. 14 in its retail stores, on its website, at 1-800-SPRINT1 and through select additional retail channels.
Prices on the iPhone 4S will be $199.99 for the 16GB model, $299.99 for the 32GB model and $399.99 for the 64GB model. Those prices also are subject to a new-line activation or eligible upgrade and two-year agreement. Sprint said plans for the iPhone start at $69.99 per month plus a required $10 Premium Data add-on charge.
AT&T and Verizon Wireless also have the right to sell the iPhone 4S and will allow customers to pre-order the device beginning tomorrow.
Sales of the iPhone could put Sprint in a better position to compete with its larger rivals, AT&T and Verizon Wireless both carriers already have activated millions of iPhones and continue to grow their subscriber bases. In a research note Sept. 30, JPMorgan analyst Philip Cusick said his firm estimated that about 20 percent of Verizons postpaid handsets sold during the first half of the year were iPhones versus 40 percent at AT&T.
Sprint could use the help of the iPhone: In the second quarter, despite its best postpaid churn and lowest prepaid churn in nearly six years, the company lost about 101,000 customers on contract.
Sprint will be able to appeal to wireless customers, particularly those individuals ages 18 to 34, who don’t have a smartphone yet but want one, said Yankee Group analyst Denise Lund.
Smartphone fanatics or wannabes moving off their contracts with AT&T or Verizon Wireless also may have an incentive to move to Sprint because of its unlimited data option. Sprint is striving to distinguish itself from AT&T and Verizon, which have both phased out unlimited data offerings with the exception of customers who are grandfathered in.
With Sprints unlimited data plans, customers dont have to worry about throttling or surprises on their monthly bill due to data overage charges like they might with tiered data plans from other carriers,” Sprint declared in a press release.
Sprint, of course, cannot just rely on the iPhone to improve its position in the marketplace.
“I feel strongly at the end of the day Sprint or any carrier that wants to maintain or grow .. has to focus on its competitive pricing and network service quality,” said Lund, citing a Yankee Group 2011 consumer survey that highlighted the importance of the latter attributes.
In a research note last month, Goldman Sachs analyst Jason Armstrong forecast escalating competition in the fourth quarter in anticipation that AT&T, Sprint and Verizon Wireless would offer the iPhone 5 model for the first time ever. Although Apple only introduced the iPhone 4S model, Armstrongs general prediction below is logical enough particularly given that the U.S. wireless market is saturated. Wireless penetration in the U.S. was 96 percent at the end of last year, according to CTIA-The Wireless Association.
We believe the availability of the iPhone across carriers could also spark a more intense promotional environment to attract subscribers,” Armstrong wrote.
In some respects, the iPhone 4S could benefit all the U.S. carriers that are selling the device. The iPhone 4S offers features that are more competitive with Android-based smartphones, including intelligent voice commands and better speeds for downloads, Yankee Group analyst Lund said.