Sprint places data consumption cap on phone-as-modem feature

It turns out Sprint's claim of unlimited data has a few limits.

In October, Sprint placed a 5-gigabyte monthly cap on Sprint Mobile Hotspot, a service that allows you use your smartphone as a Wi-Fi modem for $29.99 a month. Data used over 5GB now cost 5 cents per megabyte. Previously, the service was unlimited if you used it on Sprint's network.

Sprint says the change was made to help lighten the traffic on its data network, and customers were notified of the change in the September billing statement. "We want to continue to provide our unlimited data plan. And we wanted to make the changes necessary to continue to do that," says Sprint spokeswoman Emmy Anderson. "We notified customers 30 days in advance of the change."

Anderson says the Hotspot is an add-on service that comes with no contractual obligation. "Customers who are unhappy can remove the service, and add it later. They have quite a bit of options."

Other carriers also charge for phone-as-modem features, also called "tethering." Customers, especially those who live in the so-called 4G coverage areas, have been increasingly dropping the Internet subscription at home and using their wireless carriers' hotspot features for a Wi-Fi connection at home, burdening the already crowded data networks.

Sprint's change caught customer Bob Lorentzen by surprise. The president of a video production firm in Bradenton, Fla., says he was unaware of the 5GB cap until he saw his January bill and found the change disappointing.

"The primary reason I switched from AT&T to Sprint was Sprint's unlimited data plan, including the unlimited data when I used my phone as a hotspot," he says, adding Sprint provides no way to determine if he's close to reaching the 5GB limit.

Sprint also caps off-network data roaming at 300MB per month, including data consumed wirelessly on the smartphone or phone-as-modem usage. The cap has been in effect since mid-2010.

In November, Sprint also placed a 4G data usage limit on its MiFi service, which allows a hotspot to be shared by up to five devices. The limit varies depending on the selected plan. The 3GB plan costs $34.99 a month. Data consumed on its older 3G network had been subject to the cap prior to the change in November.

"I can see their point. I can't argue about it. But the point is if Sprint's CEO is going to say it's unlimited data, it really ain't true," Lorentzen says.