Sprint Happy to Carry the iPhone, But Loses Money On It

Sprint was extremely pleased when it reached an agreement with Apple to carry the iPhone on its network, but that deal is expected to cost the U.S.’s third-largest carrier a whopping $15 billion over the next four years. Nevertheless, Sprint’s chief executive Dan Hesse, who took a $3.25 million pay cut earlier this month to please shareholders, is optimistic about carrying the iPhone on the network he heads.

“We’re very happy with it,” Hesse said of Sprint’s deal with Apple, during the company’s annual shareholders meeting Tuesday. “Carrying the iPhone will be quite profitable.”

While the initial investment of carrying the iPhone has been rather burdensome for Sprint, the carrier expects to benefit from Apple’s handset in the future. Sprint is expected to continue losing money the iPhone until 2015, but Hesse notes that it will slow subscriber turnover and create a new class of high-value subscribers for the carrier.

“We believe in the long term,” Hesse said. “And over time we will make more money on iPhone customers than we will on other customers.”

Sprint sold 1.5 million iPhones in the first quarter, and 44 percent of those units were purchased by new Sprint customers.


Post a response / What do you think?