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How Sprint’s Prepaid Net Additions Fared in Fiscal 3Q17

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Sprint’s prepaid net additions during fiscal 3Q17

In the earlier part of this series, we learned about Sprint’s (S) postpaid phone customer net additions in fiscal 3Q17 (quarter ending December 2017). Now let’s take a look at Sprint’s prepaid customer net additions. The telecom company continued its modest turnaround in its prepaid component during fiscal 3Q17.

In fiscal 3Q17, Sprint added 63,000 net prepaid customers as compared to 460,000 losses in fiscal 3Q16. This growth in prepaid customers is primarily due to lower churn and higher gross additions in the Boost brand. Earlier, Sprint’s management noted that the company has an agreement with Apple to sell used or refurbished devices under the Virgin brand.

Costs related to prepaid subscribers are far less than the costs related to postpaid subscribers, which makes them more cost-effective. Acquisition expenses, maintenance expenses, and upfront expenses are all lower for prepaid subscribers.

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Sprint’s peer comparison of prepaid net additions in 4Q17

In 4Q17, T-Mobile (TMUS) and AT&T (T) gained 149,000 and 140,000 net prepaid subscribers, respectively. Meanwhile, Verizon (VZ) lost 184,000 prepaid subscribers during the same quarter.

At the end of 4Q17, T-Mobile’s prepaid subscriber base was the biggest with 20.7 million subscribers, while Verizon’s prepaid customer base was the smallest with 5.4 million customers. Sprint and AT&T had 9.0 million and 15.3 million prepaid customers, respectively.

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