Sprint throttle

Sprint Nextel is supposed to be the carrier with no limits. Or is it?

Sprint CEO Dan Hesse told investors today that his company actually places limits on the data connection of 1 percent of its customers, a practice in the industry known as throttling.

"For those that want to abuse it, we can knock them off," Hesse said.

A few publications, including Dow Jones Newswires and Boy Genius Report, rightfully took this as the carrier placing the limits on its supposedly "truly unlimited" data plans.

But a Sprint executive Bill White denied this was the case. Sprint's businesses include its prepaid arms Boost Mobile and Virgin Mobile, both of which do practice throttling, and Hesse was referring to those customers.

"We don't throttle our unlimited postpaid customers," White said. "He is not referring to postpaid."

Sprint has repeatedly stripped away the unlimited offer from many of its services except for its core contract smartphone data plan. Over the past year, the company has done away with unlimited plans for its prepaid business, mobile hotspots, and USB laptop cards.

Sprint has kept the unlimited smartphone plan because it believes the offer is one of the key differentiators for the company. That's particularly the case with the iPhone 4S, which both AT&T and Verizon Wireless also carry. In heavy rotation is an iPhone commercial that touts Sprint's unlimited plan.

White did say customers who violate the terms and conditions could be limited, but that would involve turning the phone into a modem by tethering it to another device.

"Unlimited doesn't mean you can hook it up to a server farm," White said.

Sprint has moved in the opposite direction of larger rivals AT&T and Verizon Wireless, which both offer plans with specific data caps and a tiered pricing structure. AT&T is the only one that offers a cheaper tier for limited data use.