I’m all for iPhone availability, and I was more than happy when Apple’s flagship handset made its way to Sprint, but I’m very surprised that Sprint execs felt the same way when they signed on to carry the phone. That’s because, according to recent comments from Sprint CEO Dan Hesse, his carrier won’t actually make any money from the iPhone until at least 2015!
Apparently in order to offer the iPhone to its subscribers, Sprint had to agree to a pricey deal with Apple. How pricey? Well the nation’s third largest carrier agreed to pay over $15 billion in iPhone subsidies over the next four years. This means that until something can be reworked, Sprint actually loses money up front every time it sells an iPhone.
While this may seem like strange business practices, it actually makes sense in the long run. Hesse believes that iPhone owners are the most loyal in the cell phone world, a sentiment I tend to agree with. Because of that, and the fact that Sprint is the only carrier willing to offer unlimited data plans, the iPhone is bringing Sprint more and more loyal customers. What’s more, once 2015 rolls around, Sprint will start profiting from the iPhone and it’ll have a ton more customers than it would have if the iPhone wasn’t part of its lineup.
“We’re very happy with it,” Hesse said of Sprint’s deal with Apple, during the company’s annual shareholders meeting Tuesday. “Carrying the iPhone will be quite profitable.”
“We believe in the long term,” Hesse said. “And over time we will make more money on iPhone customers than we will on other customers.”
Hesse is definitely putting a lot of faith in Apple and its fans, but I do believe it’ll pay off in the end. I have to admit, between the rational thinking of its CEO and the fact that teh carrier is sticking by its unlimited data plan, Sprint is starting to sound better and better every day…
Via: Cult of Mac