Sprint CEO says they'll make money on the iPhone... in 2015

Sprint CEO says they'll make money on the iPhone... in 2015

During their annual shareholders meeting, Sprint CEO Dan Hesse said they're very happy with the iPhone, but admitted that it won't be profitable for the company until 2015. Sounds crazy, but Hesse says they're taking the long view, since offering the iPhone will stem the exodus of users going to other carriers just to get their hands on Apple's smartphone. Plus, iPhone users tend to be heavier data users, so that means bigger plans. (Or in Sprint's case, opting for the unlimited plan.)

Hesse had to take a bonus cut as a concession shareholders upset at the up-front cost of iPhones, but the future does actually look pretty bright. They've confirmed that they'll keep unlimited plans around for the next generation iPhone, even if it has LTE, and recent surveys show that Sprint customer satisfaction is pretty high.

That leaves another two and a half years of paying for their iPhone deal, which reportedly cost them $20 billion. Granted, they didn't have much success with either webOS or Android, despite the lower up-front costs, so it's still difficult to see a basis for the complaints -- other than shortsightedness.

There's also the not-so-small matter of Sprint's initial, WiMax based 4G rollout, which is hard to view as anything other than a failure. They're switching to LTE now, but they're behind AT&T and way behind Verizon, and it will take time and money to catch up, neither of which Sprint has in abundance.

When the next generation iPhone hits, presumably this fall, will unlimited data make up for the lack of Sprint LTE footprint? Or will even more customers go with Verizon's very wide, o

So the question is, how healthy is Sprint going to be looking in three years compared to Verizon and AT&T? Will the iPhone gamble pay off? And will they at least still be doing better than... T-Mobile?

Source: AllThingsD

Simon Sage

Editor-at-very-large at Mobile Nations, gamer, giant.

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There are 12 comments. Add yours.

Rick says:

This guy ought to be thrown in jail for embezzlement. He's stealing from the company every two weeks in the form of a paycheck.

tham says:

It won't stop my exodus to another carrier to escape crappy data speeds.

appleking says:

sprints network went to crap with the iphone4s but with the news today thay verizon is ending grandfathered plans im out to sprint.. there lte network will be up and running in nyc by then and it will be unlimited

Eric says:

The network was crap long before the iPhone showed up.

Akki says:

Sprint were loosing customer because their network is not as good as Verizon or At&T and not because they didn't had iPhone as many editors and users on iMore thinks. WiMax is fail. In NYC inside the buildings their 4G is worse than T-mobile or AT&T's 3G forget about LTE. Only one company that will make lots of money out of this deal and that is Apple. Sprint would have been better off spending $20B in network upgrade than filling up Apple's bank account.

Rene Ritchie says:

Android, on both Verizon and Sprint, did not generate enough ARPU and did not sufficiently reduce churn. If it had, Verizon and Sprint wouldn't have agreed to Apple's high cost, and -- especially maddening for carriers -- higher level of control. T-Mobile has admitted publicly that, despite their Android device line up, not having the iPhone on their network has hurt them.
If the Droid or the Evo had been as successful as the iPhone, Apple would be in a very different bargaining position than where they are today.
It's not the editors at iMore that think this, it's the executives at Verizon and Sprint who have said this. With their wallets, and their willingness to give over control of end-user-experience to Apple.
Denying this is equivalent to looking at a blue sky and calling it red just because you don't want to admit it's blue.

Pimp Lucious says:

You can rightfully argue that they did need the iPhone in order to compete with the other majors, but to say that they didn't have success with Android is false, goes against historical facts and is just bad writing.

Akki says:

Verizon was never loosing customers when they didn't had iPhone. Tmobile/Sprint were most loosing customers because of their network. Last year TMobile was also hanging with potential merger with At&T. Sprint Wimax is well known bust. Do you really expect executives will say they are loosing customer because their network is not as good as Verizon? Of course they will blame it to something that will not look bad. BTW, last time Q4 2011 you had a headline that TMobile lost customer because of iPhone. This year they added customers. And guess what they still don't have iphone. Why don't you publish that with headline, TMo added new customers without iPhone. Now, of course iPhone is best selling device and everyone wants to add that. But it doesn't mean they are bleeding and dying without iPhone. Sprint will specifically loose big because now every major carrier has iPhone except TMo. When only At&T had iPhone there was no major competition to Apple. Now competition is strong. And it will only get stronger when BB10 and Windows 8 will come in market. Android/Samsung is already proving tough nut. Let's see how Sprint makes money on iPhone in 2015? As of now, it all looks like they went in wrong direction. At last, nothing wrong in being fan but please don't twist things in your favor when it suits you. iPhone is very good device but wireless industry is too big to die without it.

d2globalinc says:

Pretty sure they are making money on android btw

appleking says:

yall make no sense sprints network was amazing when they were bleeding a million customers ever quarter.. ever since the evo and the iphone sprint cdma has been gainin subs..

frog says:

Sounds like a good investment in the long run