uploads///Telecom Sprint Q Postpaid Phone ABPU

Understanding Trends in Sprint’s Average Billing per User

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Sprint’s postpaid phone average billing per user

In this part of the series, we’ll take a look at Sprint’s (S) postpaid phone average billing per user. In fiscal 2Q17 (ended September 2017), Sprint’s postpaid phone ABPU fell ~3.8% YoY (year-over-year) from $71.69 in fiscal 2Q16 to $68.95. According to the company, the main reason for this fall was “lower insurance revenue resulting from the change in the company’s device insurance program.” Normalizing for this change, its postpaid phone ABPU was relatively flat YoY.

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

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Sprint’s postpaid ARPU

ARPU represents wireless carriers’ unit service revenue. In fiscal 2Q17, Sprint’s postpaid ARPU fell ~9.0% YoY to $46. Sprint’s postpaid ARPU has been falling sequentially over the last few quarters, affecting Sprint’s postpaid service revenue. According to the company, about 78% of postpaid phone customers are now on unsubsidized service plans, compared with 76% in fiscal 1Q17. As unsubsidized plan penetration increases, telecom companies could improve their postpaid ARPU.

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