Sprint reports $1.4 billion loss in Q2 due to Nextel unwinding and iPhone subsidies
0. phoneArena 26 Jul 2012, 06:50 posted on
If it wasn't for such expenses, Sprint actually had a pretty good quarter, adding 442, 000 net subscribers, and logging its best ever quarterly churn rate of 1.69. The company took in $7.3 billion of revenue in the quarter, an 8% increase over Q2 of 2011...
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1. MeoCao (unregistered)
Sprint should sack the CEO, what a idiotic CEO.
Sprint will lose much more as they will have to buy lots of iPhones and keep them in store b-c people will buy mostly Androids.
5. Fallout09 (Posts: 421; Member since: 17 Oct 2011)
I don’t understand where your hate for Dan comes from? Dan is moving that Titanic of a company back on course however it is proving a little harder due to the giant iceburg called Apple that put a 15 billion dollar hole in the hull. I have complete confidence that Dan will patch the hole and will get the ship moving at full steam again.
7. MeoCao (unregistered)
a CEO must have clear picture of future market. This man simply placed all the company's asset on his iPhone bet. As a leader he should have seen that the future does not belong to iPhone because the ecosystem is closed and iOS cannot compete with powerful Android manufacturers. And without Steve Jobs Apple will go down not up to justify his 15B bet.
33. E.N. (Posts: 2610; Member since: 25 Jan 2009)
Let's not turn this into another Android vs. iOS debate. We all know that you like totally luv Android. But if you look at his decision from a unbiased perspective, you'll see that he did what he had to. The fact of the matter is that millions of people want the iPhone and I'm sure they know that many customers would not have considered sprint at all, even with all of their many Android devices if they had not offered the iPhone in their lineup. And let's not pretend that the next iPhone 5 won't sell millions. I'm sure Sprint wants a slice of that.
And additionally, Sprint knew this was going to happen. They already predicted months ago that they were going to lose a lot of money first before they made any profit, so this loss wasn't a surprise. The way I see it, everything so far is going according to plan.
"without Steve Jobs Apple will go down"
Wait a couple of months and we'll find out, lol
9. J-LoTheGreat (Posts: 32; Member since: 07 Oct 2011)
And not to sound coy, but the Titanic actually sank bc of the iceberg. It's going to take alot to make up BILLIONS of $$$
19. galaxyisking (Posts: 58; Member since: 18 Nov 2011)
great analogy!!!! king of the world....
12. phnrpt (Posts: 14; Member since: 28 May 2012)
sprint's lost is due to not having galaxy note.
iphone is history.
galaxy note rules for at least next year.
20. Sprintfan (Posts: 68; Member since: 18 Nov 2011)
LOL. The galaxy note is a NICHE device. The amount of people switching carriers to this device is less than minimal. Sounds like U MAD because you want one. Sprint hasn't lost anything because of this device.
28. lsutigers (Posts: 820; Member since: 08 Mar 2009)
Sprint is going nowhere but up, they are building the most advanced network in the country, significantly increasing their coverage, consolidating networks / reducing costs, have one of the best device portfolios, good customer service and are gaining customers. They are selling more iPhones to NEW customers than AT&T and VZW, thus taking business away from the competition. The Sprint Prepaid Group is the strongest, largest and most innovative in the US. Once Network Vision is complete, with LTE Advanced on 1900mhz and 800mhz, 1xRTT / 3G Advanced, VoLTE / HD Voice, Clearwire's 20x20mhz TD-LTE Advanced and the iPhone LTE is released, Sprint will continue to gain more and more market share.
15. superiorbeefjerky (Posts: 14; Member since: 18 Feb 2011)
uh....you mean "an idiotic..."?
If anything Dan should have jumped on iPhone bandwagon when VZ did.
25. Sprintfan (Posts: 68; Member since: 18 Nov 2011)
MeoCao. You are an uninformed moron. Do you want me to list the improvement Sprint has made since Dan took over? You are the idiot with your remark and are clueless to the turnaround that has happened andis still in progress.
31. DonkeySauce (Posts: 194; Member since: 03 Dec 2011)
Sprint already sacked the CEO that got the big mess started: Gary Forsee. If Sprint wasn't struggling with the Nextel base, running two networks and having to fight all of the issues that come with it, they would be in a much better position right now.
2. Knicknevin (Posts: 148; Member since: 18 Mar 2011)
During his time, Sprint has made the most business oriented decisions in terms of actually bringing home a profit...
3. som (Posts: 768; Member since: 10 Nov 2009)
Sprint already spent $15 billions fee for iPhone deal and Apple make $15 billions in profit from Sprint. Sprint lost of profit every quarter due to iPhone deal.
22. Sprintfan (Posts: 68; Member since: 18 Nov 2011)
Wow. Where do you get your information from? Sprint added a better % of new iphone customers than VZW and ATT per customer base size. 40% of iphones sold in the quarter were new activations The deal of the Iphone hasn't been disclosed publically. So if you think Sprint is losing a ton of money from this get your facts straight. Iphone customers are not profitable right away. Once the subsidy is payed the customer becomes profitable and they don't churn.
4. Aeires (unregistered)
They gave up too much to get the iPhone and the other phones that made them great they screwed up. Instead of an EVO2, they went with the Evo Shift and EVO 3D, both a poor follow up to an outstanding phone. The Photon was a good phone but never heard anything about it, they continually screwed the S2 owners with delayed updates, and their network sucks big time. Good luck Sprint, you're going to need it.
17. EclipseGSX (Posts: 1717; Member since: 18 Oct 2011)
An EVO2, does that even exist lol? Pretty sure that's on HTC not Sprint. There were much less successful phones than those and it's really Apples fault they are in the hole for overcharging on the iPhone
23. Sprintfan (Posts: 68; Member since: 18 Nov 2011)
Again. "$782 million accelerated depreciation related to its Network Vision program, which includes dismantling the Nextel network. Sprint's investment in Clearwire also brought on $204 million impairment." No where in the earnings does the Iphone cost come into play. The pace sprint is selling Iphones is huge. A companies profit is about how many customers they add, not about what phones they carry. Back your blabber up with some facts before spewing what you think effected a companies earnings.
29. Aeires (unregistered)
Suppose those guys don't know what they're talking about either? And where's the rest of the $1.4 billion, you only mentioned $782 million and the $204 million portion?
Bottom line is this, the iPhone brings as problems as solves.
6. Jeradiah3 (Posts: 1031; Member since: 11 Feb 2010)
Sprint and Verizon fall under the same boat: They didnt need the iPhone to be profitable. Both of them have made their money from Android. Sprint made their presence known with the original Evo 4G (the first 4G* phone) and Verizon with the Droid Family. Why mess that up with the iPhone? Its a good device, but theres alot of red tape that comes with it.....................ASK AT&T lol
Sprint didnt need the iPhone and are now paying for it..............Literally
24. Sprintfan (Posts: 68; Member since: 18 Nov 2011)
Ok buddy. Sprint didn't need a million new customers becasue of a device.. You are smart.
8. J-LoTheGreat (Posts: 32; Member since: 07 Oct 2011)
Nice job "Banking" on the iPhone! Anyone could have told you that was a mistake. Actually I think people did. How's that "Unlimited Data" iPhone doing for you today?
10. QWIKSTRIKE (Posts: 1079; Member since: 09 Mar 2010)
They bought the declining iPhone and that is the nail in thier profit coffin. Apple is not innovative enough to lead and is spending more time litigating against competitors like Samsung, HTC, and Motorola than inventing new products to lead as they did with the launch of the iPhone.
Apple changed the mobile game for ever, but they ceased leading and became followers with troll patent wars, and crap law suits to stifle competition. Sprint was doing ok until the Apple deal. They did this deal when Apple was becoming irrelevant in the product cycle to Androids like Motorola, and it's new coming HD, or the SG III, or HTC 1X soon to launch 1XXL variant.
Apple is now playing catch up with a 4.3" display when every one has a 4.7-4.8" display. SG III is now the dominate phone of choice in Asia for the 1st time in years according to the latest reports. Apple knows this and is trying to do everything they can to stop Android, and it seems deceitful patent wars are the way. An example would be one patent that was issued by a judge when it was IIRC already patented by other companies, or like the last patent they tried to get through and the old Judge found to broad and vague because its something every one has done already in past devices......a great company gone the way of a psychotic criminal for greed.
Apple probably thinks that they could patent every thing up with vague already placed patent's like the touch screen that was already invented, and being used on my then pocket pc "Windows" phone in the early 2000's, and every one would want or have to buy their phones.
However their closed system, and crap business tactics cause me to never ever want to buy any thing they produce, especially after I found out how they treat the workers in China. Steve Jobs money got him to the top of the new pancrea's list, and had a replacement operation, but the twist in fate in my opinion was his greed for money and lack of respect for the people in China that sen him many personal notes of how they were being treat in his factories. They sent him messages about being exposed to hazardous chemicals and workers getting sick, and dying et he did nothing.
Retribution was bitter sweet because in the end his operation didn't save him!
Now we will suffer from this poor business transaction I believe. We should have spent money on LTE, and expanding the network coverage, and that is why people were leaving Sprint. Verizon said in their last conference call that was their biggest reason for adding subscribers....LTE expansion.
When Windows 8 launches, and the 1XL variant coming to Verizon, and the Galaxy Nexus launch this fall I feel Apple will be come irrelevant, and be no more the fad that it was. Apple's last iPhone launch seems to suggest that they shot their load already. To get new sales they are following Android now because they swore they would never create a 4.3" phone because they were irrelevant, and not warranted by the "iCrowd"!
26. Jeradiah3 (Posts: 1031; Member since: 11 Feb 2010)
I wish more people were more aware of the big pictureinstead of a small speck. some carriers that see the iPhone sees $$$$ signs, but forgets about therestrictions that comes with it. as innovative as the iPhone was in 2007, it needs to remain innovative to stay at #1 in 2012.
5 years in the digital world is like 2 million years worth of human evolution lol
11. Dion25 (Posts: 42; Member since: 25 Jul 2012)
Sprint added almost 500,000 new contracts, there's No way that happens with just android phones. The thing that hurts is apple has the higher subsidy cost per phone than all others. Pay us now for our phones wait and get yours over the duration of the contract this is apples thinking. But there's no way Sprint survives without IPhone just ask T mobile whos share holders wanted out after they learned they were not getting the iPhone.
13. QWIKSTRIKE (Posts: 1079; Member since: 09 Mar 2010)
Sprint is adding new contract also because of tiered data my friend. Go to other forums and I read a lot of unhappy customers leaving for the free data, and I am sure that the iPhone may have something to do with it.
Unlimited data is now or main draw, and a hopeful network vision that will put us at the top of the wireless chain. However; if they try to kill unlimited once 4G LTE is implemented I will leave after staying loyal for 15 years so far!
Verizon claims 230 million customers and said in a conference share holder call that 4G capital cost are so low that they made 49% margins last quarter. They also said that "LTE" was the main reason for adding new subscribers and that "ARPU" was becoming profitable because of data on LTE. They continued to say that placing new subscribers into tiered data was the way to go to monetize the new LTE, and also converting old grand fathered unlimited data also would be a new way to monetize LTE to create even greater profits for the investors.
Tiered data would make them much greater than the 49% margins because they are obviously structured to monetize data overages, and higher structured data packages offered.
This way they can "monetize" data by offering higher cost for higher usage. Switching from 3G to more efficient 4g eliminates congested data that the 3g networked faced which there by allows customers to buy up the 20gig data plans for obvious better profits to Verizon.
Don't some of you fools think that 4G LTE, and the new upcoming VOIP will cause data bottle necks and there by cost carriers more, because Fran Shammo said the opposite in the conference call to his investors..... Google this before posting bull crap rhetoric.
Sprint Da n Hesse has said that 4G LTE will not have data bottle necks like 3G, and he will keep unlimited plans. However; I know greed and this poor business transaction with Apple may cause this to fail. When it does I am leaving if they try to take my unlimited data period!
21. SugarShockFrantic (Posts: 73; Member since: 05 Jul 2012)
When Sprint added the Iphone it just raised there pricces. now they have all there xtra and hidden fees attached to thier contracts becuase Sprint has to pay for the iphone. I personally would prefer T-mobile to not get the Iphone and my billing stay the same.
32. DonLouie (Posts: 594; Member since: 22 Dec 2008)
What extra fees, other than Premium data anything else is voluntary?
14. Dion25 (Posts: 42; Member since: 25 Jul 2012)
I agree with you 100%, the main draw to Sprints network at this time is thier unlimited plan. However I don't think Unlimited with Android keeps Sprint alive. Verizon who by far has the most subscribers realized they had to add IPhone to thier network to stop the momentum AT&T was building with iPhone exclusive. To me not having IPhone on your network is like owning a sneaker store, you have all the other brands , Adidas, Puma, Converse, Reebok, all these brands are nice but without Nike you won't make it.
18. Carlitos (Posts: 501; Member since: 23 Oct 2011)
How come they never mention how many Android handsets they sell? Is it like forbidden.
27. Sprintfan (Posts: 68; Member since: 18 Nov 2011)
Why is Sprint stock up 20% today? Why has sprint gained more growth in stock % than all the cell companies this year? Why is Sprint adding more customers than they are losing for Sprint post-paid? Why has Sprint had the biggest turn around in Customer Service between all buisness in American history? Why did Sprints average payment of a customer go up larger than any cell phone company in history? Why does Sprint have the the largest pre-paid customer base? Why is Sprint building the most advanced network in the world along with the best and fastest unlimited LTE?
The amount of people in this thread all saying these results are from iPhone is laughable. The article is about the quaterly earnings. None of you know the details of the contract made with apple was and how it effects Sprints earnings and losses. The only thign stated was the amount used to purchase devices and the subsidy cost went up $400 million. With which is acceptable based on the amount of customers added.
Haters gunna hate.
30. CRICKETownz (Posts: 980; Member since: 24 Oct 2009)
Is a stock currently worth $4.05 worth talking about? that's like going from a train wreck to pitiful. Prepaid customer base, in the bigger scheme of things, is not exactly a cash cow. Just ask Virgin Mobile, tracfone, etc. Adding more subscribers than losing is good but unfortunately keeping them so far behind the competition that its not relevant. Still offering unlimited data doesn't create a win b/c the customer base using 500MB-1.5GB vastly outweighs those power users. Customers switching carriers is a constant revolving door for various reasons, some network related & some relations-related. Do you think that those who are further along than Sprint in their LTE technology are going idlely sit by as they build this fastest and best (according to your post) LTE? Sprint's playing catch up which we ALL knew would happen as they went for WiMAXX to be known as the first to offer 3G+ & figure the rest out later...let's not forget that. Now it seems like we are approaching "figure it out later". You bring up valid points in the strides Sprint has made...but your facts are comparing mole hills to mountains. The positives that Sprint has made recently aren't significant enough to make an impact at this stage in the game.