Sprint’s leased devices
Sprint’s (S) device leasing has helped it to regain its financial position. The company is striving to gain a long-term competitive advantage with its formation of a leasing company. Due to the financial advantages of leasing, it’s anticipated that Sprint’s lease revenues could continue to increase going forward.
During fiscal 1Q17 (quarter ending June 2017), the company saw an increase in the mix of postpaid device activations being leased at ~55%. As you can see in the below chart, leased devices in the carrier’s property, plant and equipment, net were ~$4.3 billion at the end of fiscal 1Q17. During fiscal 1Q16, this figure was ~$3.8 billion. Among the top four major US wireless carriers, Sprint and T-Mobile (TMUS) offer leasing plans. AT&T (T) and Verizon (VZ) do not.
Sprint’s handset leasing benefits
Sprint’s management is expecting a substantial number of used iconic devices to come back during fiscal 2017 (year ending March 2018). The company receives these elapsed devices through the iPhone/Galaxy Forever programs. The iPhone Forever Plan allows users to replace their Apple (AAPL) iPhone every year. Sprint refurbishes and resells these devices. By reselling its used devices, Sprint is expected to produce some additional revenue.
Further, the company recently launched a Sprint Flex program that allows users to lease any phone with the option to upgrade or purchase the device later.