Sprint CEO says paying over $15 billion for the iPhone was money well spent
Sprint CEO Dan Hesse spoke with a group of reporters touring Sprint’s headquarters, and told them that the deal to get the iPhone on the Sprint network was too good to pass up; even though Sprint had to commit over $15 billion in purchases to Apple over the next four years. The news comes from a report by Ina Fried of All Things D.
“I think the No. 1 thing was getting the call from Apple that they were interested in at least having the opportunity,” Hesse said. Of course, the company and its board had to take a hard look at the economics. Selling the iPhone is good for the long term, Hesse said, noting that customers are more valuable in the long term. But, in the short term, it is costly, as the company spends more in subsidies to attract those iPhone buyers.
“We committed to $15.5 billion over four years in purchases,” Hesse said. “That’s a large commitment. ”He said Sprint looked at Apple and its popularity, and “we saw no reason to bet against Apple.”
Hesse also talked about Sprint’s other gamble with its investment in WiMax rather than LTE. Hesse claimed that the choice to run with WiMax was all down to timings. If Sprint ran with WiMax it would be the first network with an operational high speed network. If it had chosen to run with LTE, it would have been last to offer LTE; as it didn’t have the spectrum to launch a reliable service.
Sprint may have the iPhone on its network but the iPad has remained elusive. When Hesse was asked about the possibility of having the iPad on the Sprint network, he declined to make any comment.
If an when Sprint gets their LTE network up to speed, and they offer the iPad, would their unlimited data plans entice anyone to switch over from AT&T or Verizon?
Source: All Things D