Will unlimited data plans give the Sprint iPhone enough for conquest sales?

There is little doubt that when Sprint begins servicing iPhones, current Sprint customers will switch to it. The real question that must be answered to determine Sprint’s long-term future is whether or not they’ll get conquest sales from Verizon and AT&T.

Rumors have been circulating about unlimited data plans since it was first discovered that Sprint would be getting the iPhone. Many believe it’s the only way they can turn this into a successful move; investors are already worried. They need a big win or the gamble they’ve made by betting so much on a successful iPhone could crush the company.

Now, Ina Fried at AllThingsD has confirmed that there will indeed be unlimited data plans with the Sprint iPhone.

“We will be offering the benefit of our unlimited plans that start at just $69.99,” said Sprint’s Michelle Leff Mermelstein. Add in the $10 monthly smartphone surcharge and unlimited data will be $79.99 with 450 voice minutes and $30 more for unlimited voice and data combined.

Will it be enough to make this deal lucrative, i.e. will a lot of current Verizon and AT&T customers make the switch?

Absolutely

It won’t be as much as statement in favor of Sprint as much as a punishment for AT&T and Verizon. As the ISPs and cellular data providers shift towards tighter bandwidth restrictions with caps and penalties, the users are increasing their use of smartphones and other mobile devices for online activities.

People will switch and the timing couldn’t be better for Sprint as contracts from the heavy 4th quarters of the last two years will come due for renewal.

The real risk isn’t as much in the sentiment of current AT&T and Verizon customers – they’ve already started expressing their displeasure – but rather in three challenges:

1. A growing awareness of using WiFi whenever available
2. An increasing range of available WiFi in public places and homes
3. The network – can it handle the influx of data traffic?

Sprint has bet heavy on the iPhone. They’ll need to bet even heavier on the marketing of the iPhone and their other offerings and continue down the path of informing people that their data service is unlimited. If they can do that (and there’s no reason to believe they won’t) they will be successful initially.

Their long term success will depend on issue #3. If the network is deemed unsatisfactory compared to their competitors, people will avoid them in the future. People want coverage and speed more than removal of limits. What good is unlimited if it’s unreliable.

“We have every confidence in the ability of our 3G network to handle the influx of devices we expect to get,” said Mermelstein. “It certainly hasn’t been an issue to date.”

If that holds true and Sprint gets the marketing machine revved up, they should be a valid competitor in 2012. If they can’t this gamble might doom them by 2013.