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Sprint Woos iPhone 5 Buyers With Unlimited Plans Despite LTE Disadvantage

NEW YORK ( Trefis) -- With the iPhone 5 is likely to be launched this fall, the carriers are getting ready to market their services.

One key factor that we believe will differentiate this generation of the iPhone from the previous ones, apart from a possible change in form-factor and better processor, is the availability of an LTE-compatible chipset.

While carriers such as Verizon (VZ) and AT&T (T) are getting ready to tout their respective LTE networks, late-entrant Sprint (S) just started to roll out its first LTE markets this week.

Its marketing strategy will most likely remain unchanged from the last year when it aggressively promoted its unlimited plans. But is it going to be a big deterrent for Sprint to move more iPhones out of the door in order to meet its huge commitment to Apple (AAPL)?

We don't think so and here's why. (See our complete analysis of Sprint here .)

Unlimited Plans Still Valuable

One of the major reasons why we think Sprint's strategy will work is because unlimited plans are as important today as they were a year ago -- possibly, even more when you consider that Verizon and AT&T are distancing themselves from unlimited plans further.

Both stopped offering unlimited plans to new subscribers a year back, and now Verizon has stopped its grandfathered unlimited users from availing handset subsidies if they choose to keep their plans. (See Verizon's Share Everything Plans Could Kill The Last Unlimited Plans .)

It is likely that AT&T, having made its displeasure with unlimited plans clear on many occasions, will also come up with similar ways of discouraging usage of unlimited plans as it looks to follow in Verizon's footsteps and promote tiered data plans that can be shared across devices soon.

Also, unlimited plans will be more valuable for LTE than they were for 3G since LTE is a higher-speed technology and will easily cause subscribers to overshoot their monthly quota for tiered plans. In such a scenario, Sprint will remain the only national carrier to offer truly unlimited plans (T-Mobile throttles 3G speeds after a certain limit), which it can still use as a very effective ploy to lure subscribers away from the two larger carriers.

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