uploads///Telecom Sprint Q Postpaid Phone ABPU

Evaluating Trends in Sprint’s Average Billing per User

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Sep. 4 2017, Updated 6:37 a.m. ET

Sprint’s postpaid phone ABPU

In this part of the series, we’ll take a glance at the postpaid phone ABPU (average billing per user) for Sprint (S). Sprint’s postpaid phone ABPU fell year-over-year (or YoY) in fiscal 1Q17 (quarter ending June 2017). It fell ~3.7% from $72.17 in fiscal 1Q16 to $69.51 in fiscal 1Q17. According to the company, the primary reason for this YoY decrease was the “lower insurance revenue resulting from the change in the company’s device insurance program.” Normalizing for this change, postpaid phone ABPU was relatively stable YoY.

ABPU includes service revenues and installment payments made by postpaid users. These installment billings are a part of equipment revenues. Wireless giants like Sprint, T-Mobile (TMUS), AT&T (T), and Verizon (VZ), generate a stable source of income via service revenues and installment billings.

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Sprint’s postpaid ARPU

Now we’ll take a glance at Sprint’s postpaid ARPU (average revenue per user). ARPU represents the unit service revenues of mobile carriers like Verizon, Sprint, AT&T, and T-Mobile. In fiscal 1Q17, Sprint’s postpaid ARPU fell ~8.2% YoY to reach $47.30.

Sprint’s postpaid ARPU has been falling sequentially over the past few quarters, which is negatively impacting Sprint’s postpaid service revenue. According to Sprint, about 76% of postpaid phone users are now on an unsubsidized service plan as compared with 74% in fiscal 4Q16. If the penetration of unsubsidized plans increases, it could help Sprint improve postpaid ARPU decline.

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