Fantastic!! Sprint Nextel just announced a new rate plan. It is a flat rate, all you can eat, all encompassing; call anyone even if they are on another carrier network major hit.

I love and hate flat rate plans. I believe flat rate is good for the consumer. I hate flat rate because it is a major pain in optimizing revenue with services – in other words, flat rate is a low margin business. Frankly the move is bold.

Why is it bold? Sprint Nextel just rewrote the entire mobile rate plan book.

The move makes sense. Voice and basic texting have been commoditized for years. Carriers like Verizon have used the buddies and family type plans effectively to build up their customer bases. I have noted in the past that carriers needed to make their money off of the new mobile media offerings through subscription rates and advertising.

This new plan is called the Any Mobile, Anytime plan. It is being offered as an extension of Sprint`s Everything Data plans. Sprint’s subscribers to the Everything Data plans will be automatically migrated to the Any Mobile, Anytime plan at the beginning of their next billing cycle. The Any Mobile, Anytime plan service features will be rolled into the current Everything Data plans; calls made to other wireless subscribers will be deducted from the user`s Everything Data minutes.

This new approach to circle plans will definitely appeal to users who don’t like being tied to specific lists of users just to keep their rates low. Could this new billing plan hurt Sprint financially? The answer is: Yes there is a potential for Sprint to be hurt financially. However, the underlying philosophy of flat rate billing is that you make up for the lower margins with higher volumes.  So it is reasonable to assume that this new plan will vastly increase calling volumes.

I believe that Dan Hesse just found another game changer. First it was prepaid and now it is the basic rate plan.

The new approach will attract new customers and a new generation of users. I was not sure how Sprint Nextel would follow up the Palm Pre. I have said the company needed to a way to re-energize its efforts after the Palm Pre failed to significantly jump start Sprint Nextel. I am sure people will disagree with me. However, I had high hopes for the Pre.

Getting back to the new expanded circle rate plan. Sprint Nextel’s approach has the beauty of making the consumer feel less like a hostage and more like a free spirit. The point I am making is the downside of the buddies and family approach to rate plans is that the consumer becomes the unwilling salesperson for the carrier. I forgot how many people have asked me which carrier I use and I could lower my rates if I signed up with their service provider. True voice and basic texting pricing have been dropping slowly and steadily – the plans may as well have been called flat rate. However, Sprint Nextel’s action has given massive life to the flat rate plan by making it an all encompassing plan. Now consumers can call anyone regardless of the carrier the called party uses – and all with a low monthly rate.

I will say that Sprint Nextel’s new rate plan is a home run.

Score another one for Sprint Nextel and Dan Hesse. Dan you just hit one right out of the park. Bold, exciting, and a game changer of a decision.

Hesse now needs to take a step toward enhancing its media offerings.