Sprint’s prepaid net additions in fiscal 3Q17
In this article, we’ll look at Sprint’s performance in the prepaid category. It will be interesting to see how many prepaid customer net additions Sprint is able to get in fiscal 3Q17 given the intense competition from T-Mobile (TMUS) and AT&T (T) and increased efforts from Verizon (VZ) in the prepaid segment.
In fiscal 2Q17, Sprint gained 95,000 net prepaid customers as compared to 449,000 losses in fiscal 2Q16. This growth in prepaid customers is majorly due to lower churn and higher gross additions in the Boost brand. Additionally, Sprint has an agreement with Apple (AAPL) to sell used or refurbished devices under the Virgin brand.
Costs associated with prepaid customers are far lower than costs associated with postpaid customers, which makes them more cost-effective. Acquisition costs, maintenance costs, and upfront expenses are all lower for prepaid customers.
In 3Q17, T-Mobile and Verizon added 226,000 and 139,000 net prepaid customers. Meanwhile, AT&T gained 324,000 net prepaid customers during the same quarter. At the end of 3Q17, T-Mobile’s prepaid customer base was the largest with 20.5 million customers, while Verizon’s prepaid customer base was the smallest with 5.6 million customers. Sprint and AT&T had 8.8 million and 15.1 million prepaid customers, respectively.