updated 07:45 am EDT, Wed April 25, 2012
Sprint sees only slight iPhone demand drop
Sprint on Wednesday reported steep losses for its winter quarter but had relatively strong iPhone results. The company's losses nearly doubled, from $439 million a year earlier to $863 million, owing largely to a $543 million depreciation from the Nextel iDEN network ramp-down. At 1.5 million iPhone sales, however, it saw only a slight drop from the fall in what's widely believed to be its primary smartphone platform.
About 44 percent of those adopting Apple's phone were new to Sprint, the carrier said. The iPhone helped Sprint's regular subscriber base grow for the eighth quarter in a row, by a modest 263,000. An accelerated shift towards smartphoens saw Sprint's average revenue per person climb 6.9 points to nearly $60. Customer turnover was higher among regular subscribers, at exactly two percent, but was pinned on a one-time blip in "involuntary deactivations" from customers who were facing stricter terms for failing to pay or otherwise violating conditions.
Finances were partly helped by a $170 million kick from ending the LightSquared deal. The cost of subsidizing iPhone users was partly helped by more of those new users coming through direct retail instead of alternate sources.
All of Sprint's current hope is placed on its LTE network, which is still set to go live by the middle of the year. Officially, it's still expected to reach six initial cities, although leaks have suggested more. Its first LTE phones are already on the market, including its version of the Galaxy Nexus and the LG Viper 4G LTE. Outside of the currently 3G-based iPhone 4S, its main hope for the spring is being placed on the HTC Evo 4G LTE, a sequel to its most popular pre-iPhone device line.
Sprint expects to eventually turn a corner in financial health, both through the iPhone and through its streamlining its network through the Network Vision consolidation and iDEN's end. With a total of $7.6 billion in cash and $1.2 billion of unused lending, however, it would have only a few years at most for these improvements to take effect at its current loss rate.