Sprint CEO says paying over $15 billion for the iPhone was money well spent

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

chrisoldroyd

UK editor at iMore, mobile technology lover and air conditioning design engineer.

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There are 12 comments. Add yours.

Dark_Blu says:

I switched from AT&T long before the iPhone came to Sprint, due to the true unlimited services. As long as it remains unlimited, I'll be there. They ever change to capped data plans, there'd be no reason to remain on their slower network.

Macboy74 says:

They have half the subs that AT&T and Verizon do so they can stay truly unlimited. They have nobody on their network to weight it down.

Juiceair says:

So true. I left Sprint a couple of months ago and haven't looked back. Now I get coverage everywhere I go and better customer support. An iPhone on Sprint is really just an iPod Touch that may or may not make phone calls.

TheDisher says:

I am glad I have Sprint, but I just wish the service was faster!! I hate not being able to listen to iHeartRadio without interruption in the car...

RC46 says:

Sprints unlimited plans do not work for tablets. In fact their tablet plans are worse than the other 3 big carriers.

At this point Sprint is a complete joke. Edge speeds is the best that over 50% of their subscribers can hope for. I just ran a speed test and got a 2700 ms ping, 0.04 Mps down and 0.11 up. At that speed it takes about 10 seconds to download an email with no images in it.

Vanti says:

Would you like to hear something funny? Metro pcs has LTE in more cities than sprint does? Granted their just licensing it but still even they have more than sprint does and my friends crappy metro phone blasted me out of the water.

agentmobile says:

I agree sprint is a joke. No offense to their loyal customers. I just switched from sprint to AT&T 3 wks ago and I have been SO happy with my new and improved 4S...I had to sell the sprint iPhone because I needed the AT&T one and the sprint phone said "3G" at the top and my AT&T one says "4G" up there and it's true the AT&T HSPA+ network IS basically 4G just not quite as fast as LTE obviously, I speedtest.net my phone daily, and when I had sprint I was clocking it at literally 0.04-1.13 mbps....so incredibly slow it was pitiful. Having unlimited data means nothing at that point. I now get speeds of 5.00-10.00 Mbps daily, and my mom has the galaxy S3 which is LTE capable and she gets blazing fast speeds. My girl has Verizon and they too have very fast speeds in my area (south Florida). Sprint has great customer service albeit a little over the top friendly, I just hope sprint wakes up and updates their towers it's ridiculous.

9thWonder says:

for many sprint customers low cost is a primary concern. for you it's different. how satisfied one is tends to be dependant on what sort of user you are. i want fast data but not enough to pay extra at this point.

SockRolid says:

Re: "Of course, the company and its board had to take a hard look at the economics."

And they all probably got a good look at Apple's iPhone roadmap. "Love ya like a brother, Tim, but for $15 billion we need to see your plan. Due diligence, ya know."

Premium1 says:

Of course he will say this. What's he gonna say it was a terrible investment and get fired. Come on now. Plus sprint may have unlimited but with how slow it is its not worth it to many.

9thWonder says:

I have sprint. I am generally satisfied but yes their data network is not strong. I'm in L.A. by the way. That said, cost is my primary concern so i'm have a contract so switching isn't an issue. And i simply have no interest in a tablet that requires a data plan. That's just an extra unneeded expense. i can find wifi when i use a tablet if i'm away from home. So lte and tablets are not an issue for me.

LTE went live in San Francisco this week briefly for testing. So it is on the way in the future. http://www.theverge.com/2012/8/7/3226515/sprint-sporadic-lte-service-in-...

regardless. the cost of verizon is not worth paying more to me at this point. My contract doesn't end until 2014 so for that long i'll probably be with them at the very least.

crash712us#IM says:

I bet sprint is laughing all the to bank! All the money there saving on data, to bad it will only be short lived. In another year they'll go belly up after everyone the roped in leaves. The person who commented the iphone on sprint is nothing more than a iPod on sprint hit the nail on the head. Utterly useless, Hesse is a crook!