11/08

What Does Sprint’s Unlimited Data Plan Say About NextRadio?

sprint

Lots of folks in the radio space are talking about Emmis’ NextRadio initiative to activate FM chips in smartphones (here and here), but not a lot of folks in the industry are paying attention to NextRadio’s primary partner, Sprint.

Remember that one of the driving arguments for NextRadio is that consumers can conserve bandwidth by tuning in radio over-the-air without eating up precious bits and bytes.

But nobody in radio seemed to notice Sprint’s announcement last month that they would offer unlimited data plans in an effort to compete with the same type of offer from T-Mobile.

As basic economics would argue, demand for bandwidth will force companies to compete on the price of bandwidth, and so they are.

So what does this mean?

It means that Sprint has calculated that they have more to gain by making what consumers want – unlimited data – more affordable than by emphasizing consumers’ ability to route around data caps by, for example, listening to radio via FM.

Put another way: More digital access is preferred over workarounds to more digital access.

Beyond that, it suggests that access to bandwidth in general is one of the most important drivers for subscription in the mobile space.

Meanwhile, earlier this week Sprint announced they were cutting 2,000 jobs after losing subscribers for an 11th straight quarter, thus framing the bandwidth announcement as something of a Hail Mary pass, despite the dollars paid to Sprint by radio partners.

Everybody needs to recognize that while there’s nothing wrong with activating FM in smartphones per se, it’s a distraction from the real opportunities available to broadcasters. It’s a good idea from the perspective of broadcasters, but it skirts the issues of greatest concern to consumers. 

We live in a world of consumers, not broadcasters.

And if you don’t believe me, ask Sprint’s shrinking subscriber base.

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