By Bruce Meyerson ASSOCIATED PRESS
NEW YORK – 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.
While not inexpensive, the unusual approach to pricing wireless service could carry profound consequences for the industry if it proves popular and Sprint decides to roll it out nationally.
Sprint Nextel Corp. already began moving in that direction in January with a pricey $200 unlimited calling plan for high-volume users. There are some regional carriers and niche service providers offering unlimited plans, but Sprint's plan appears to be the first mainstream wireless offering of this sort in the United States.
The last substantial shift in cellular pricing came nearly a decade ago when the old AT&T Wireless started wiping away the distinction between local and long distance with the launch 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 your monthly allowance. This contrasts sharply with the landline world, where the rapid spread of unlimited plans over the past decade has created a carefree, all-you-can-eat mentality for local, long-distance and even international calls in some cases.
The consumer embrace of unlimited calling plans for landline 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 despite the fact that most customers don't use up all their minutes each month.
One potential problem for cellular companies is that wireless networks have far less call capacity than the fiber-optic cables of the traditional telephone system.
While 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, damaging its reputation for years to follow.
For Sprint, the new attempt to set itself apart from the pack comes at a crucial time. The company has stumbled badly following the 2005 merger of Sprint and Nextel. Hundreds of thousands of high-paying Nextel subscribers have fled due to 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 come on a wider trial or rollout.
The potential savings from the bundle would depend on the cost of the calling plan a user is switching from. 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.
