Analyzing Sprint’s Device Leasing Strategy in Fiscal 2017



Sprint’s leased devices

Sprint’s (S) device leasing has allowed it to reclaim its financial position. During the last few quarters, the take rate of Sprint’s leasing plans surpassed its installment plans. 

Due to the economic gains of leasing, it is anticipated that Sprint’s lease revenues could grow going forward.

During the JPMorgan Tech, Media and Telecom Conference held on May 22, 2017, Marcelo Claure, Sprint’s CEO, spoke about Sprint’s device leasing strategy. 

Article continues below advertisement

Claure stated that Sprint is expecting several million used devices to come back in fiscal 2017.[1. fiscal 2017 ending March 2018] Claure noted, “Some of them are going to go into the offshore market, utilizing Brightstar, absolutely. And then some of them are going to be reutilized into some of our prepaid brands.”

Sprint’s handset leasing benefits

Sprint receives the lapsed devices through its iPhone and Galaxy Forever programs. The iPhone Forever Plan allows customers to replace their Apple (AAPL) iPhone every year. The company refurbishes these devices and resells them into the market. As a result, Sprint is expected to generate additional revenues as it relates to reselling used equipment.

In fiscal 4Q16, Sprint’s net leased devices in property, plant, and equipment totaled ~$4.2 billion, an increase from ~$3.6 billion during fiscal 4Q15.

Among the top four major US wireless giants, Sprint and T-Mobile (TMUS) offer device leasing plans, whereas Verizon (VZ) and AT&T (T) do not.


More From Market Realist