Why Apple’s iPhone 6 could instill life into Sprint



Sprint introduced an attractive iPhone 6 plan in September

Apple’s (AAPL) iPhone has always been a lucrative business for telecom providers like Verizon (VZ), AT&T (T), Sprint (S), and T-Mobile (TMUS). iPhone users tend to be heavy data users. As a result, they benefit these companies. The companies continue to devise attractive marketing plans surrounding the iPhone.

Sprint started a plan in September. It was the unlimited plan for iPhone 6. The plan is $50 per month. Under its “iPhone for Life” plan, the unlimited rate plan would be combined with a phone leasing option starting at $20 per month. Sprint is clearly underpricing its unlimited plans from T-Mobile. T-Mobile’s plans start at $80 per month.

Unlimited plans are a unique selling point for Sprint because Verizon and AT&T don’t offer unlimited plans.

Sprint net postpaid subscriber losses

Sprint could make a comeback next quarter 

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The plan had an immediate impact on Sprint. During the earnings conference call, Sprint’s management mentioned that in September, it delivered its highest monthly postpaid gross additions since December 2012. This number increased sequentially by 40% in September—compared to August. It increased 7% in October—compared to September. September was the first month in 2014 that Sprint delivered year-over-year (or YoY) growth in number of net phone additions.

Also, the iPhone 6 became the most successful iPhone launched in Sprint’s history. In the four weeks after the launch of the new iPhones, Sprint experienced an increase of 2.5x in customers upgrading to the new model—compared to last year’s iPhone launch.

This is important progress for Sprint. It has been losing net postpaid subscribers at a fast rate. As the chart above shows, the net postpaid subscriber loss at Sprint was 272 million in fiscal 2Q14—up from 181 million subscribers lost in fiscal 1Q14.

If Apple can help Sprint keep September’s momentum in the next quarter, Sprint would gain net postpaid subscribers. This would be the first gain in a long time.


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