Sprint iPhone with unlimited data may not budge users from AT&T, Verizon

The Apple iPhone 5 that Sprint is expected to begin offering this October (Unfiltered: A Sprint iPhone: Didn't we see this coming?) will be paired with an unlimited data plan, Bloomberg is reporting, citing people "familiar with the matter."

Despite being the first major U.S. carrier to offer 4G services, Sprint's lack of an iPhone has been partly blamed for its increasing distance behind rivals Verizon and AT&T. An iPhone will offer Sprint a needed asset that — paired with an unlimited plan priced lower than its rivals' iPhone plans, even before any overage fees — could be a game-changing advantage.

"For Sprint, pairing the iPhone 5 with an unlimited data plan is a no-brainer," Ken Hyers, an analyst with Technology Business Research, told Connected Planet. "Provided Sprint can maintain network quality — and they have lots of capacity right now — they can brag that while other carriers won't provide unlimited data to iPhone customers, Sprint will."

One major unknown about the Sprint iPhone is whether it will be able to take advantage of Sprint's 4G assets. While the carrier plans to begin rolling out LTE, its current 4G flavor is WiMax — a technology Apple is unlikely to support. Will the Sprint iPhone 5 run on only 3G CDMA EV-DO — a network less equipped than more-efficient WiMAX and LTE technologies for supporting the data-hungriest users — or will Sprint's transition to LTE happen sooner than expected?

Even if Sprint were to move immediately toward LTE, it will take some time before it would have a passable network. Sprint has only started building the Network Vision architecture that would allow it to host partner LightSquared’s future LTE network—that is assuming LightSquared receives permission to build it (CP: GPS industry lightens its tone over latest LightSquared plan). Sprint’s primary 4G provider Clearwire has plans for an LTE network of its own, but they are on hold until it gets more funding (CP: As the 4G road forks, Clearwire chooses both paths).

Sprint has invited media and analysts to a "strategy update" event in New York Oct. 7, where it's widely expected to announce, after years of rumors, its acquisition of an iPhone. Short of landing an LTE or WiMAX phone, Sprint could still have a successful launch, though it might have to lower expectations. It could upgrade current feature phone or Android users to the iPhone, locking them into new two-year contracts. It could wave in fleeing T-Mobile subscribers. Or it could even lure away Verizon and AT&T iPhone customers with a $70 unlimited plan.

Hyers says the big question for now is whether an unlimited data plan is enough to entice AT&T and Verizon iPhone customers to Sprint's network.

"My bet is that most current AT&T and Verizon iPhone customers will stay put," Hyers said, "since most don't use all of the data in their current plans each month and are unwilling to break their current two-year contracts to go to Sprint."