Sprint bankruptcy a legitimate risk as Apple jumps on the LTE bandwagon

By , Mar 20, 2012

Sprint’s stock fell 4% yesterday as investors reacted to a report that the risk of the carrier going bankrupt was increasing. Bernstein analyst Craig Moffett downgraded Sprint shares from “market-perform” to “underperform” based on the news.

While the company, which happens to be the third largest wireless provider in the US, has had a long string of poor quarters over the past few years, analysts had high hopes for the carrier after it finally became an iPhone partner late last fall…

But then earlier this month, Sprint was once again left out of Apple’s keynote as the company announced two new LTE-flavored iPads for Verizon and AT&T. Both carriers have since announced record-breaking tablet sales.

Moffett believes that Sprint could be in even more trouble if Apple releases an LTE handset later this year. The carrier, which was actually the first to claim “4G” data speeds here in the states, has a nationwide WiMax network, but is looking to make the switch to the more common LTE technology sometime in the near future.

And that switch can’t come soon enough. Between the costs of upgrading its network and the $15 billion dollar debt it’s paying out as part of its iPhone agreement, Sprint can’t afford to be left out of another major Apple release.

What do you think will happen to Sprint?

[Reuters]

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  • Abraham Nissen

    I actually think it is a great time to invest in Sprint. First of all they are supposed to be done with their entire LTE rollout in 2013 I think some ATT customers will migrate to Sprint because of Sprints prices plus it has a very solid prepaid industry to help them weather the storm and I don’t think their partnership’s have been such a failure as everyone has made it out to be.

    • http://twitter.com/Sil3nc3R Andrew Gates

      Agreed. They’re the only carriers with WiMAX experience and that’s what customers really need

  • http://twitter.com/AngelGaytan2 Angel Gaytan

    Sprint needs to get its act together, it has too many customers in order to fail, finally switching to LTE would not only be a dramatic change but perhaps increase numbers of new oncoming customers from both AT&T and Verizon…

  • Anonymous

    Lets not “write off” Sprint so quickly!!!

    Remember, it was not too long ago when people were ready to dismiss Apple as being bankrupt and not worthy of investing in. Then, Steve was brought back, and turned Apple around.

    Perhaps the Board of Directors of Sprint can learn from Apple’s history and get rid of that DB “Dan Hess” and his stupid “self-glorification, egotistic” commercials he runs!

    And as fellow poster Abraham Nissen wrote on his post… “…it is a great time to invest in Sprint.”

    • http://twitter.com/Sil3nc3R Andrew Gates

      Apple was hardly bankrupt, and it was actually the Apple company that turned Jobs around. They bought his company, NeXT, which was not doing well for the amount it took to pay off its investors, had him come back to work at Apple and after seven months, he became interim CEO and then the permanent CEO four years after that. Let this be a lesson to you investors out there – only the men & women who start a tech company can lead it to success. Suits drive companies into the ground, the CEO has to have vision.

      Sprint will be okay because they are the only mobile telecom that have not moved their pricing setups outside what an average American can afford and treat their customers well. They also have great devices now, although the $15b dropped on the iPhone was a huge mistake. They should have invested that into innovative data services, instead, it all got tied up in Apple and now they have to expand LTE and 3G HSPV+ services to support the iPhone. The network should have come first – hard lesson learned. And the fact that Apple made them pay that is, in my playbook, anti-competitive. So is not allowing that payment to go towards all iOS devices. I understand everyone loves Jobs, but one thing is for sure, he led his company into acting pretty crappy sometimes. It makes no sense not to let Sprint sell & serve your devices – is a sale not a sale? Now that the Samsung Galaxy III is out and made its way into Sprint with no problem, they could have nixed the iPhone for now, built up the network and revisited the idea later. Sprint’s CEO made a huge miscalculation that the company needed the iPhone and only the iPhone to stay in business.

  • Aric Bolf

    Before i bought the iPhone 3G with AT&T, I was a sprint customer…and hated it! Voice-mails took a week (not lying here) to deliver to me. Only reason i stayed with Sprint was my contract was up and wanted to stay open for the iPhone 3G. I will never go back to that company.

  • http://k-p-b.com/ Stephen Chhouth

    As a sprint customer with a 4s i hope they bounce back, i just left T-Mobile in Jan to Sprint and I’m loving it so far except the reception at my job which is to be expected since only Verizon customers have the best here, but other then that im satisfied, better experience then TMO IMO

  • Anonymous

    Heres an idea. Apple buys Sprint and launches its own carrier. They have the money with reports of about $100 billion in cash.

    • http://twitter.com/Bu1137 Bu1137

      Yes! I’ve been saying the same thing! If carriers keep screwing with their customers data usage (AT$T and Verizon), Apple may need to take things into their own hands and provide a more proper user experience (unlimited data).

    • http://twitter.com/GuyBey0ndC00L eDDie

      I like that idea

    • http://www.facebook.com/profile.php?id=100000346061485 Ernesto Castellanos

      I think it violates antitrust laws. What we don’t need is a monopoly. Don’t get me wrong, that would be great! But it’s for our own good if they stay where they are without their own carrier.

  • http://www.facebook.com/people/Luis-Dominguez/100000411307848 Luis Dominguez

    What does this mean then? Are they saying that Sprint will not see a LTE iPhone when it comes out this summer/fall?