Why Soaring Data Usage Isn't Good for Sprint

The CTIA just recently released some stats on the domestic wireless industry. Incredibly, mobile data usage posted a 104% jump to 1.16 trillion megabytes of data delivered through U.S. mobile data networks between July 2011 and June 2012. That's been driven both by the migration to faster 4G LTE and broader adoption of mobile devices such as smartphones and tablets. Since Sprint Nextel still offers unlimited data plans for a fixed fee, it has no direct revenue to gain from increased data usage, while its larger rivals AT&T and Verizon have since switched to tiered plans, where more usage translates into more revenue. See the following video for more.

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Evan Niu, CFA, owns shares of AT&T and Verizon. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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