Sprint Had to Cough Up $15.5 Billion to Get The iPhone

By , Oct 27, 2011

Sprint has revealed that its deal to carry Apple’s iPhone will run for four years, costing a whopping $15.5 billion.

The carrier has been criticised for the money it had to pay Apple to get the iPhone on its network, although, with AT&T and Verizon already sporting the iPhone on their networks, it’s debatable whether Sprint really had any choice but to cough up the cash.

Fear not, Sprint shareholders, for your man in charge is confident that they can bleed customers dry, and ultimately, turn a profit…

CEO Dan Hesse said in yesterday’s earnings call that, thanks to iPhone users spending and the reduced possibility of them leaving, Sprint should still make money on that $15.5 billion deal.

“We expect the lifetime value of a typical iPhone customer to be at least 50 percent – yes, at least 50 percent – greater than a typical smartphone user, driven primarily by more efficient use of our network and lower churn”

Hesse also believes Sprint will shift around 1 million iPhones in the fourth quarter. As a yardstick for that claim, remember that AT&T and Verizon shifted 2.7 million and 2 million iPhone 4s in the last quarter, respectively. Considering the fact Apple’s iPhone 4 sales were lower than expected thanks to anticipation of a product refresh, those numbers are possibly lower than one would expect.

Sprint will be hoping that strong iPhone sales are enough to keep the struggling carrier afloat over the coming months. The fear has to be that anyone who really wanted an iPhone has already left for AT&T or Verizon, and the rest bought their new handsets on iPhone 4S launch day.

Only time will tell whether sales continue, or whether Sprint’s golden goose is done hatching eggs.

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  • Rob

    Wonder what Cspire had to do to get the 4s?

  • Kickstar13

    Wow, $15.5 Billion. Let’s see if it really helps Sprint in the end. I would be very surprised if it did.