After AT&T and Verizon dropped their unlimited data plans, Sprint continues to be the only carrier offering unlimited plans to new customers. With Sprint using ‘Truly Unlimited’ in their tagline, analysts see this as a marketing stint or a desperate attempt to hold on to subscribers after having faced five years of losses.
AT&T and Verizon stopped offering unlimited plans to new customers in 2010 and 2011 respectively. This March, AT&T began imposing speed limits on their heaviest data users. Verizon went ahead and declared that customers who used subsidized phones will not be upgraded if they continue to prescribe to unlimited plans. However, for Sprint, it is a different situation. In September, they entered into a four year deal with Apple, agreeing to purchase iPhones worth $15.5 billion, in order to be given the permission to sell the device. By the first quarter this year, they managed to activate only 1.5 million iPhones, falling dramatically short of their goal.
Sprint is well aware that they will not benefit from the sale of iPhones at least until 2015. The high subsidy paid by Sprint to sign up their iPhone customers has resulted in their operating profit margin going down by 2 percent. However, Sprint is hoping that the loyalty of Apple customers and long-term profits will help cover up for the high upfront costs, as stated by the company’s spokesman.
On account of their financial issues, Sprint has not been able to offer network upgrades similar to those offered by competitors. They recently announced that on the 15th of July, Dallas, Kansas City, Atlanta, San Antonio and Houston will have access to upgraded 3G services and 4G; a part of their strategy to cover 120 million users by the year end. Meanwhile, AT&T and Verizon are already offering 4G speeds to 75 million and 200 million users respectively. Out of 12,000 sites, Sprint has managed to upgrade only 600 to 4G LTE.
Analysts blame Sprint’s deal with Apple for their inability to invest in upgrades, with the carrier falling short of spectrum to launch a LTE network competitive enough to rival AT&T’s and Verizon’s. The end result, of course, is that Sprint’s customers will end up communicating using a weaker network. Sprint already owns 50 percent stake in Clearwire, a company that is working on building a network based on WiMax, competing with the 4G LTE network. However, ultimately, even if Sprint does manage to sell a lot of iPhones, they will fail at providing the coverage and speed iPhone users demand.
July 2, 2012 at 8:16 am
This article is so short-sighted. Perfect example of someone spreading false information by citing “analysts” and throwing around meaningless numbers. Do you own due diligence folks.
Analysts are actually bullish on Sprint.
Sprint is in the process of upgrading its entire wireless infrastructure, both 3g and 4g.
Yes, Sprint made a commitment to Apple and the most iconic device on the planet. What is your issue again?
Verizon and AT&T are the evil empires.
July 2, 2012 at 9:24 am
Very weakly researched article! The deal with Apple is very old news. Please do your diligence before publishing. Several glaring mistakes including: Sprint has never threatened nor talked about eliminating it’s “Unlimited Plan” (only the big wimpy carriers are passing wind about it…), Sprint is not investing in WiMax (it’s actually divesting), Sprint is Upgrading it’s entire network 3G and 4G, Sprint is building out a state of art 4G LTE (“Network Vision” a multi-billion $ investment strategy is still on track to be completed by end 2013), Sprint is taking advantage of it’s position with it’s WiMax investment by offering it as 4G on it’s PrePaid subsidiaries (Boost and Virgin), Sprint is now selling iPhones with it’s PrePaid subsidiary Virgin, Sprint is in process of shutting down the older iDEN network freeing up advantageous bandwidth and banding, there is nothing to indicate that Sprint is hamstrung by the iPhone nor will be (do you know what their plans are???), Sprint has several strategic advantages to ATT including back-haul and award winning customer service, with Sprint’s current investment strategy it is a long-term investment poised for strong future growth and most informed analysts agree.
Please stop rehashing old news (Apple deal) and do better research on multi-billion dollar companies you attempt to slam. Thanks!
July 2, 2012 at 10:15 am
I agree Tim. Obviously a regurgitation of misinformation. I’m interested to know how iphone users are demanding “speeds” that they can’t use since there isn’t an LTE iphone.
July 3, 2012 at 12:45 am
Get the facts straight. Clearwire not Bellevue. AT&T and VZW both invested in the iPhone big too. So, why no hooplah about their investment?