Sprint Adds $10/Month Smartphone Device Fee

Sprint will increase its postpaid service plan rates by applying a $10 per month "premium data" add-on charge to activations of smartphones beginning Jan. 30, 2011. Existing Sprint smartphone customers are not affected unless they upgrade to or activate another smartphone.

Sprint had earlier levied the fee for the HTC EVO, a move some called a tax for using the fourth-generation network, something Sprint would not have agreed was the most accurate way to describe the plan. Instead, Sprint positioned the charge as specific to the Sprint 4G EVO. "This is specific to the device," said

It's not related to whether you are using 3G or 4G. "It is required if you have the phone," said John Taylor, who works with Sprint. See http://tech.johntaylor.co/more-detail-on-the-sprint-evo-4g-10month-prem.

Of course, in addition to the argument that the charge was specific to the EVO, the new logic now extends to all smartphones, in large part because smartphone users consume more data.

You might wonder why Sprint did not simply increase its data plan rates. There are a couple of logical reasons. The surcharge allows the nominal data plan rates to remain unchanged, while still generating $10 per plan more revenue.

One might argue that the way the increase is billed also maintains a "simple pricing" position Sprint believes is important. Many will argue a simple $10 a month, across the board increase in mobile plans also is "simple," though.

The bottom line is that Sprint believes it must raise prices to generate the cash needed to continue funding its mobile broadband network's expansion. You can agree or disagree with that point of view, but all observers note that bandwidth demand is outstripping revenue, for virtually every mobile service provider.

Long term, especially if the mainstay revenue sources are declining, that is incompatible with continued survival, much less continuous investment in more network capability.

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