NEW YORK (AP) — Sprint Nextel is testing a novel cellular plan in the San Francisco Bay area that features unlimited call time, text messages and Internet access on a mobile phone for $120 a month.
Despite the cost, the unusual approach to pricing wireless service could carry profound consequences for the industry if it proves popular and Sprint rolls it out nationally.
Sprint Nextel Corp. began moving in that direction in January with a pricey $200 unlimited calling plan for high-volume users. Some regional carriers and niche service providers offer unlimited plans, but Sprint’s plan appears to be the first mainstream wireless offering of this sort in the United States.
Cellular pricing underwent its last substantial shift nearly a decade ago when the old AT&T Wireless started wiping away the distinction between local and long distance with the introduction of a national calling plan.
Cell subscribers are conditioned to count minutes, keeping an eye on the clock during calls or waiting for off-peak hours, mindful of the steep surcharges that come with exceeding their monthly allowance. This contrasts with the land-line world, where the rapid spread of unlimited plans over the past decade has created a carefree, all-you-can-talk mentality for local, long-distance and even international calls in some cases.
The consumer embrace of unlimited calling plans for land-line phones — popular even though many users might save money by paying per-minute fees instead — suggests that cell users might jump at the opportunity to free themselves from time worries even though most customers don’t use up all their minutes each month.
One problem for cellular companies is that wireless networks have far less call capacity than the fiber-optic cables of the traditional telephone system. Although network capacity has grown, carriers worry about a repeat of AT&T Wireless’ experience with Digital One Rate. That national calling plan proved so popular that the company’s network couldn’t handle the surge of new users and long-distance call traffic in key markets such as New York.
The breakdown damaged AT&T’s reputation for years.
Sprint is attempting to set itself apart from the pack at a crucial time. The company has stumbled badly after the 2005 merger of Sprint and Nextel. Hundreds of thousands of high-paying Nextel subscribers have fled because of service quality issues on that network, and Sprint has struggled to compete with Verizon Wireless and AT&T Inc.’s Cingular Wireless.
Sprint wouldn’t say how long it plans to offer the unlimited bundle in the San Francisco Bay area or when a decision might be made on a wider trial or rollout.
Savings from the bundle would depend on the cost of the calling plan from which a user is switching.
Sprint already offers unlimited text-messaging packages starting at $10 a month and unlimited data plans starting at $15 a month. The trial package can be expanded to include unlimited wireless Internet access for a laptop for $30 more, half the usual rate, for a monthly total of $150.
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