Sprint CFO: Unlimited war not sustainable; price hikes necessary down the road

Sprint CFO: Unlimited war not sustainable; price hikes necessary down the road
Now that all four major U.S. carriers are offering unlimited data plans, is this a battle that will go on for years? Not according to Sprint CFO Tarek Robbiati. The executive says that  providing unlimited data at current prices cannot continue. Being CFO means that Robbiati is concerned with how Sprint is spending its money (and money coming from parent company SoftBank). He says that unlimited data requires more capital expenditures to make sure that an operator's network can handle the increased capacity coming from unlimited subscribers.

Sprint is said to have a fairly large inventory of spectrum. This means that the nation's fourth largest carrier can lay in some additional cellular capacity at a lower cost than its rivals, giving them a huge advantage. Speaking about the industry as a whole, Robbiati says that eventually we will have to see price hikes for unlimited plans. Yet, the carriers don't seem to want to stop offering unlimited again, because it is obvious at this point that it is what consumers want. Even Verizon, whose CFO Fran Shammo tried to tell Big Red customers that they didn't need unlimited, had to join the party. Sprint's high frequency airwaves might also be something in its favor as far as unlimited is concerned. They don't send signals as far as low frequency spectrum, but they do carry more data.

BTIG analyst Walter Piecyk recently said that Verizon Unlimited will cost the operator $3 billion in market value. The analysis is based on the premise that subscribers will leave their high priced limited data plans for the new unlimited offering. As a result, ARPU (Average Revenue Per User) drops, earnings decline and the stock falls. However, as we told you yesterday, Deutsche Bank's analysis forecasts no ARPU drop for Verizon.


Just as each of the four Beatles were constantly analyzed as individuals, (John, funny, witty; Paul, well behaved, a tunesmith; George, the mystical silent one; and Ringo, the clown) Craig Moffett at MoffettNathanson research did the same to the four major U.S. wireless carriers. Verizon is using small cells and densification to increase capacity without having to build new towers; AT&T is consumed by its efforts to build a digital media behemoth; Sprint's inventory of spectrum means that it can won't have to spend as much to increase capacity; and T-Mobile is the only carrier focused on network competition. Moffett says that despite the consensus view, Verizon might have the winning strategy.

source: FierceWireless

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18 Comments

2. remixfa

Posts: 14605; Member since: Dec 19, 2008

with the transition to wholesale services and phone pricing, his statement is pretty mute for the near future. Softbank/sprint has openly said they want less competition so they can jack pricing up to canadian levels and that's the only reason they wanted to buy Tmobile. screw sprint.

3. NexusKoolaid

Posts: 493; Member since: Oct 24, 2011

The executive says that providing unlimited data at current prices cannot continue IF WE WANT TO MAINTAIN OUR FAT YEAR OVER YEAR PROFIT GAINS. There, I fixed it for you.

5. kaintae

Posts: 98; Member since: Dec 14, 2011

And we all know that none of these companies are concerned about their profits

4. Mxyzptlk unregistered

Sprint is a terrible carrier. They really need to focus on their network and their coverage. Their customer service is non existent.

6. joeytaylor

Posts: 957; Member since: Feb 28, 2015

They used to be one of the best for phone service......then 3g and 4g they went downhill

7. palmguy

Posts: 987; Member since: Mar 22, 2011

They laid down on the hill...... And died.

19. Crispin_Gatieza

Posts: 3168; Member since: Jan 23, 2014

The only time Sprint was a viable option was during the Nextel days. Actually, having a Nextel was a line-item scope requirement on any construction contract.

8. middlehead

Posts: 468; Member since: May 12, 2014

You mean to tell me that the carrier who makes their customer numbers entirely by throwing money at their competitor's customers and undercutting their prices by half instead of just providing decent service at reasonable prices might have to increase prices soon? I am SHOCKED.

9. Quicksword_Phantom

Posts: 180; Member since: Jun 15, 2015

RIP Sprint.

10. boriqua2000

Posts: 260; Member since: Mar 11, 2009

What sprint should do is focus more on customer service. They have way too many departments and most of them don't speak English and don't really care if you're a satisfied customer. You call sprint and spend the first 10 minutes being transferred all over the place by a robot and listening to ads. Horrible

11. SleeperOne

Posts: 370; Member since: Feb 25, 2017

Technology is working faster than wireless providers' ability to gouge us, so it's only a matter of time before companies like Sprint are (more) irrelevant.

12. L0n3n1nja

Posts: 1588; Member since: Jul 12, 2016

Well they are basically giving away phones and service to get customers, 5 lines on Sprint is less than 2 on AT&T or Verizon last i checked.

13. joevsyou

Posts: 1093; Member since: Feb 28, 2015

they have so much network yet they are 1% behind everyone else which is an actually huge amount of space in the U.S

14. Furbal unregistered

Data costs damn near nothing you ass. Bandwidth on the other hand is different.

15. patfactorx

Posts: 6; Member since: Aug 11, 2011

Nice try Sprint. We can see your financial statements and the carriers have 90% gross margins. Being a carrier means you are printing money and the investments needed are minimal compared to revenue.

16. Junito

Posts: 145; Member since: Feb 12, 2012

We've seen this rodeo before.

17. atlvideoguy

Posts: 74; Member since: Feb 24, 2012

Would the New Shamo please stand up, I repeat will the New Shamo please stand up! Sprint please go ahead and die!

18. NonFanBoy

Posts: 180; Member since: May 28, 2015

Meanwhile in India: Unlimited national calling and 30 GB data for Rs 303 (USD 4.54) per month. All hail Reliance Jio.

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