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Sprint CEO Dan Hesse on throttling 'unlimited' data and LightSquared LTE investment (update: misquoted)

Sprint CEO Dan Hesse on throttling 'unlimited' data and LightSquared LTE investment (update: misquoted)


Dan Hesse has told investors that Sprint does throttle some mobile data, for one percent of users. Hesse also noted that it would be pausing investment in its LTE partner, LightSquared.

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Dan Hesse has been chatty today, dropping two pieces of knowledge on investors today that could bear on actual Sprint users. The first is that the "unlimited" data plan that Hesse and Sprint have long touted for smartphones may not be as truly unlimited as claimed. About one percent of users on Sprint's network reportedly have their data throttled, according to Hesse: "For those that want to abuse it, we can knock them off" (see update below). Presumably he's referring to smartphone users, as Sprint already eliminated unlimited data for hotspots and other data-only plans. The throttling is mainly in line with what other carriers have admitted to but is contrary to Sprint's own advertising, which purports that Sprint is alone in offering "truly unlimited data."

That's what might affect the one percent (no, not that one percent) now, but what might affect all Sprint customers in the future is the bumpy and winding road to Sprint's LTE launch. The latest turn is that Hesse has told investors that Sprint is putting further investment in LTE partner LightSquared on hold. A Sprint spokesman elaborated, saying "The companies have agreed to realigning our deployment timeline to coincide with FCC actions." That may seem like unimportant money shifting, but it's a bad sign given LightSquared's difficulty getting FCC approval for its 4G network in light of possible GPS interference. Sprint recently gave LightSquared a small vote of confidence by giving it another thirty days to get FCC approval, but this decision seems to undercut that confidence just a bit.

Sorry to put a damper on Sprint's announcement of the first cities that will receive LTE, but in the crazy world of mobile data, it seems there's always a dark lining to any silver 4G cloud.

Update: Greg Kumparak at TechCrunch took a listen to the investor recording at Sprint and points out that Hesse seems to be implying the context here may be limited to roaming customers. We suppose it's possible that Hesse could still mean that Sprint can cut off non-roaming customers as well, but it seems unlikely in this context. Here's the full quote so you can judge for yourself:

By the way, when we say "unlimited," we have terms and conditions. Just like back in the old AT&T days when we launched Digital One Rate, you could abuse it, you know, like roaming, go and use it in your house in rural Montana all the time and you're roaming. We could cut you off. There are certain things in our terms and conditions, those abusers [...] we can manage them and we do that quite aggressively and cut them off. So for the vast majority, your 98-99 percent, to them it's an unlimited experience. But for people that want to abuse it and really run up the big data charge, we can knock them off.