Sprint's Q4: Huge bet on iPhone (just about) paid off
Sprint announced its fourth-quarter results this morning, and what a show it has been. After its third-quarter results, Sprint was hinging its bets on the iPhone bringing in new customers. In short, it won the bet but arguably by the skin of its teeth.
Sprint now serves more than 55 million customers. Breaking this down, the third largest mobile network has 33 million contract customers and 14.8 million on pre-paid, as well as 7.2 million customers from wholesale.
Sprint sold 1.8 million iPhones in the quarter. It was predicted that Sprint would sell 1.9 million iPhones, but it fell short. Verizon sold 4.3 million Apple smartphones in the last quarter, and AT&T activated 7.6 million devices in comparison
In the fourth-quarter received 1.6 million total net subscribers --- the best quarterly result since 2005. The iPhone's debut on the network brought in 40 percent of new subscribers.
Joe Euteneur, Sprint's chief financial officer, had warned that the iPhone would be far more expensive than other smartphones, but still shows customer demand amidst reluctance for the iPhone.
But Sprint's net loss for the quarter totalled $1.3 billion --- wider than last year's $929 million loss --- and dwarfs the third-quarter's $301 million losses. While the greater loss was almost expected, the depth of it was not thought to be so steep.
The wider loss was due to the subsidies Sprint gives customers on the iPhone's it sells. It was not an unwise move for the company, still holding onto a podium position for the battle of the U.S. mobile marketshare, but it will have to scale this back to claw back its losses.
However, net operating revenue grew to $8.72 billion from $8.3 billion in its last fourth-quarter. It fell just above analysts' expectations, but not by much.
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