Sprint head thinks $15.5 billion iPhone deal was the right decision, does not regret it

Sprint head thinks $15.5 billion iPhone deal was the right decision, does not regret it
Sprint’s chief executive, Dan Hesse, is the person who argued that without the iPhone the carrier simply wouldn’t be competitive, and finally last year, Sprint got it. But carrying the iPhone came with a hefty price. It’s $15.5 billion over four years, all cash that Sprint has committed to Apple agreeing that it’d sell a certain number of devices and an immense investment. Add to that the fact that Sprint is spending billions on deploying its own 4G LTE network in place of the failed WiMAX attempt, and the costs start to really look huge.

Nearly a nine months after Sprint got it, does Sprint’s head Dan Hesse regret it got the iPhone? iPhone sales have helped the carrier gain subscribers, but can’t match the rate at which the iPhone sells at AT&T and Verizon. Hesse says he doesn’t regret getting the iPhone and it was just too good of a deal to pass on.

“I think the number-one thing was getting the call from Apple that they were interested in at least having the opportunity,” Hesse said. “We saw no reason to bet against Apple… Today, looking back, I think it was the right decision.

As always, on a different note, Hesse also stressed that Verizon and AT&T have grown way too big and command a duopoly in the United States. Sprint has around 50 million subscribers compared to more than 90 million for AT&T and Verizon, and that’s a huge gap.

“The industry has to deal with the issue of the duopoly,” Hesse said. “The gap beween the number two and number three players is enormous. We always have been and always will be open to further consolidation, as long as it isn’t AT&T or Verizon Wireless.”

source: AllThingsD

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1. MeoCao unregistered

haha, may be next year Sprint's employees will have to eat iPhones for lunch b-c JB will rule the market.

2. phoenixpr

Posts: 167; Member since: Mar 28, 2012

Just please bring the 4G LTE already, pronto please, before I decide to leave.

3. SonyFTW2020

Posts: 311; Member since: May 03, 2012

To me, part of the reason companies do worst than others is because of these "exclusives" that they keep doing..........People see a really good phone get released and they want it really bad, then later they find out it will be on a carrier that is different from what they are on.....thats part of the reason why they're behind! At&t and Verizon has all the GOOD phones....plain and simple!

4. lubba

Posts: 1313; Member since: Jan 17, 2011

Of course he'll say it's the right decision. He even gave up some couple of millions his compensation to even support it. Its his job on the line. Duopoly? How? They're two separate companies.

8. lyndon420

Posts: 6822; Member since: Jul 11, 2012

A 'monopoly' is when one company dominates a market, so a 'duopoly' is when [insert answer here] companies dominate a market.

5. Bluesky02

Posts: 1439; Member since: Dec 05, 2011

I'm not american, never been been to sprint so forgive my comments which may not be accurate. Since September 2011 I'm following PA and from what I understood - Sprint main focus is mostly iPhone - They are partially fair with Android - They won't support Windows Phone anytime soon - They are loosing few customers and facing some losses - They use Android Phone as mean to recover from cost of iPhone by charging higher prices

7. tigermcm

Posts: 861; Member since: Sep 02, 2009

well dang you got it right on

13. Bluesky02

Posts: 1439; Member since: Dec 05, 2011

Pheww hopefully...

11. Jeradiah3

Posts: 1149; Member since: Feb 11, 2010

You hit it right on BlueSky02!!! Not only is it noticed here in the US, but also overseas.................Sprint made the worst deal in the mobile industry. They focused more on their phones instead of their network. I saw on a blog that US Cellular and Spring should join forces. Thats not a bad idea considering that they're both losing customers and on the same network. In the US, Its AT&T and Verizon vs.......................Everyone else

14. Bluesky02

Posts: 1439; Member since: Dec 05, 2011

Yeah Atleast AT&T is open to new phones and OS, Verizon is ok with Android and they said they'll support windows phone 8. I hope that statement is true.

15. ECPirate37

Posts: 338; Member since: Jul 14, 2011

I agree with all of that except the use of Android Phones as a mean to recover from iPhone by charging higher prices. Phones on Sprint top out at $199.99 on 2 year contract. Even when they are new like the EVO 4G LTE. It is Verizon and at&t that charge more. But everything else is spot on.

17. phoenixpr

Posts: 167; Member since: Mar 28, 2012

From what I've seen here in the USA, Android Phone are basically the same in the Sprint, AT&T and Verizon store. I think you meant T-Mobile have higher price for the Android Phone. Just to update and correct what you posted.

6. abish1234

Posts: 51; Member since: Oct 22, 2011

lol.. deep down he is like.. why d hell did i agree xD

9. DFranch

Posts: 555; Member since: Apr 20, 2012

15.5 billion divided by $650 per phone, that's 23,846,154 iphones over the next 4 years. That means almost half of their subscribers will have to get iphones in the next 4 years. A tall order since Sprint doesn't even have 4G, and Apple has about 35% of the overall smartphone market.

20. centuro1911

Posts: 12; Member since: Feb 24, 2012

That's not taking into account the approx. $2,000 per phone sold they will bring in over a 2 year contract... If only over the next 2 years they sell 5 million that'd be about 11 billion they'd bring in... Big if... But in 4 years it could pay off.

21. downphoenix

Posts: 3165; Member since: Jun 19, 2010

Well to be fair, the ones they sell via Virgin Mobile won't cut anything out of their pockets, the buyers of those have to pay for the phone full price upfront. That said, I can't see more than 1/5th of their total iphone sales going to Virgin, unless the American cellphone consumer drastically changes their way of thinking with wireless services. And technically only 1/4th of their subscribers have to buy Iphones, assuming that the ones that do upgrade to whatever next Iphone comes along when eligible. Not exactly a tall order to fill... as long as Apple stays relevent. If they continue with small screen phones only though... who knows if they will.

10. speckledapple

Posts: 902; Member since: Sep 29, 2011

I like the last comments he made. The gap between the them is way to large. I would prefer a system where at least several companies are competing highly for every text, phone, and megabyte. There are obviously disadvantages to both approaches but I think Att and Verizon has gotten too big to care about how it treats its customers and how they engage in things like bootlocking their devices, offering extreme bloatware, and limiting top releases. At some point either we increase the number of serious carriers so that more competition can ensue or just like youtube we become our own producers of content and leave these carriers in the dust with their own signals.

12. clintius

Posts: 12; Member since: Jul 23, 2012

Ok, you say it is a Duopoly. Why have this companies grown so much? Yes, there is the obvious acquisitions they have made. But also because of their phone lineup and customer service. Verizon has been in the top of customer service for several years! Also when it comes down to it, you can offer unl data to people. But when your phone's are so SLOW, it doesn't matter. Customers will pay the extra $10-20 a month for better phones and service. You have a long way to go Sprint. It will be interesting to see where Sprint is in 5 yrs.

19. centuro1911

Posts: 12; Member since: Feb 24, 2012

Cingular and ATT were allowed to combine. And then VZW and ALLTEL were allowed to combine. Sprint did combine with a company, but they were morons and joined nextel push to talk which has pretty much went away. But that combinination was nothing compared to the others.

16. DanHesseBlowsDonkeys

Posts: 6; Member since: Aug 06, 2012

I thought the Kyocera Echo was going to save Sprint?

18. Pdubb

Posts: 249; Member since: Aug 08, 2011

They missed by being a "me too" carrier. When they came out with the Evo they caught fire. They failed to follow that up and instead went with a phone that was popular on another network with which they could not compete. The iPhone is a different phone on Sprint than it is on AT&T. So after getting the phone people start complaining about how it is slow or does not work as advertised. Apple may step in and do something about the way Sprint is hurting their phones perception. Maybe with the roll-out of LTE and the new iPhone being LTE as well(???) things may change. I was truly waiting for the next big thing from Sprint but they disappointed me. They however will continue to dredge the bottom of the Android barrel and sell those phones and EOL them after 6 months. They need a better focus. Customer service has improved now phone selection should follow suit.

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