
Sprint’s 4th quarter marked the first time the benefits of the iPhone would influence their bottom line. Sprint’s earnings report definitely felt the iPhone influence, but not a way that excites investors.
Sprint’s subscriber base increased during the 4Q last year as the company added 1.6 million subscribers. The company sold 1.8 million iPhones last quarter as well, with 40% of Sprint iPhone buyers being new customers. However, in spite of all this positive data Sprint reported a net loss for the quarter reporting operating losses of $438 million up from $139 million during the 4Q last year.
The cost of admission into the iPhone party and Sprint’s ongoing mission to consolidate it’s network technology as the carrier moves to 4G LTE has sliced the carrier’s operating margin in half. This cut in margins resulted in a $1.3 billion net loss for the year which actually beat many Wall Street projections by a small amount.
The question for Sprint as they move forward with the iPhone in tow: “Will the benefits of Apple’s device outweigh the cost of investment?” If Sprint can stay afloat long enough to finish their 4G LTE network conversion, and continue to add iPhone and other users each year, the answer will likely be yes. But, there’s no guarantee that will happen, and with Apple’s phone bleeding the company dry in the short-term Sprint can’t afford for any mistakes.
Source: Mac Rumors
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