Sprint’s postpaid upgrade rate
Apple’s (AAPL) iPhone has always been a lucrative business for major telecom providers Verizon (VZ), AT&T (T), Sprint (S), and T-Mobile (TMUS). iPhone users tend to be heavy data users, which benefits these companies. These telecoms continue to develop attractive marketing plans surrounding the iPhone.
The national carriers have offered multiple promotional plans to attract other carriers’ customers. Despite these activities, Sprint managed to increase its postpaid upgrades during the quarter. Sprint’s postpaid upgrade rate dipped to 6.4% in fiscal 2Q16 from 7.8% in fiscal 2Q15. However, the iPhone 7 launch in September spurred a seasonal uptick from 5.4% in fiscal 1Q16.
Sprint’s iPhone 7 offer
Sprint (S) offered subscribers a free 32 GB iPhone 7 in exchange for an older model, which must be fully paid off. The subscriber must stay with the carrier for 24 months to receive full credit for the device. Additionally, Sprint is offering an 18-month lease for the iPhone 7 and traditional two-year contracts that allow customers to upgrade for as low as $199 up front.
Sprint and T-Mobile announced that their preorders for the iPhone 7 and iPhone 7 Plus had exceeded their preorders for the iPhone 6 and Plus by more than four times. There was no such statement from Verizon and AT&T.
This is an important development for Sprint, which has begun to recover from years of subscriber losses with promotions like Unlimited Data and Cut Your Bill in Half. As a result, the company is making progress both on subscriber acquisition and retention.