Sprint Has Big Subscriber Turnaround Due to iPhone

Posted by at 11:33 am on February 8, 2012

Sprint on Wednesday revealed a huge upswing in subscriber additions through its inaugural quarter of iPhone sales. It sold 1.8 million iPhones during the fall, 40 percent of which went to people new to the network. Apple’s device was almost single-handedly responsible for returning Sprint to performance it hasn’t seen in years: at 1.6 million net new subscribers, it saw the most adds since 2005 and had set a new high for its customer base at 55 million.

About 539,000 of net additions were the postpaid base, suggesting Sprint might have lost customers without the iPhone. Most of the disproportionately low growth was owed to 378,000 push-to-talk IDEN subscribers leaving. Sprint estimated that nine percent of its regular subscribers had upgraded during the fall, a hike from the summer that was once again credited to Apple.

The subsidy costs of the iPhone did cut into the company’s OIBDA (operating income before depreciation and amortization), dropping it from $1.32 billion a year ago to $842 million this year while also cutting the margin. Sprint estimated that its margin would have been 8.8 percent higher than the 10.8 percent it made.

Its average revenue per person, however, jumped $3.69 over the course of the year, which was not just a record for Sprint but for the US cellphone industry. It could credit this to new iPhone subscribers adopting smartphone plans and paying more per month.

Sprint posted a $1.3 billion loss for the fall, although the iPhone wasn’t blamed for the shortfall. A $241 million one-off set of charges included $135 million of investment in Clearwire. The company was also paying off some debts sooner than they were owed to help raise money for its LTE network switch coming this year.

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