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  • Sprint CEO Dan Hesse says iPhone users are "more profitable" than others


    Sprint CEO, Dan Hesse, said that iPhone users are “more profitable” on a whole when compared to other subscribers using phones running on other platforms such as the Android OS in an interview with Mobile World Live. The statement was qualified with Hesse noting that iPhone users have a low churn rate and end up using less data on average than other smartphone customers using high-end 4G Android devices. He pointed out that the less bandwidth used by iPhone customers who already have paid for unlimited data plans presumably translates to lower operating costs and therefore higher profit margins.

    Hesse continued by saying that “from a cost point of view and a customer lifetime value perspective, [iPhone users] are more profitable than the average smartphone customer.”

    This all started with Sprint first announcing its deal with Apple that would allow the company to sell the popular device back in October 2011. At the time, the nation’s third largest carrier was banking on recouping up front costs with subscriber revenue. Before working out the deal with Apple, Hesse was quoted saying that the device was the number one reason why his company was losing customers.

    Sprint’s February 10-K report revealed that the company planned to exceed the $15.5 billion minimum purchase agreement with Apple despite a decline in wireless profits which were all due to high subsidy costs. With the iPhone officially launching on Sprint’s network in October with the debut of the iPhone 4S, the carrier managed to sell 1.8 million units over the 2011 holiday quarter alone. Hesse mentioned that “four out of every 10 iPhones” the company sold were for “new customers.” This equated to “roughly double the rate of” Sprint’s competitors, which is exactly what the company was looking for.

    Source: Mobile World Live
    This article was originally published in forum thread: Sprint CEO Dan Hesse says iPhone users are "more profitable" than others started by Akshay Masand View original post
    Comments 8 Comments
    1. RoloDiva13's Avatar
      RoloDiva13 -
      News flash: the sky is blue

      REALLY, Hesse? AT&T and Verizon (not to mention a couple dozen int'l carriers) could've told you that if you weren't sure :-)
    1. quidam_brujah's Avatar
      quidam_brujah -
      According to AT&T, iPhone customers are a huuuuuge burden on their network. So much so that legacy 'unlimited' subscribers need to be throttled.
    1. RoloDiva13's Avatar
      RoloDiva13 -
      Quote Originally Posted by quidam_brujah View Post
      According to AT&T, iPhone customers are a huuuuuge burden on their network. So much so that legacy 'unlimited' subscribers need to be throttled.
      Perhaps, but do u seriously think AT&T would give up those iPhone customers (even for Androids or Blackberry)? I think not. There is a reason iPhone customers were given exceptions to upgrade early when no one else was in 2008-2010. Over the yrs AT&T has made special policies for these customers. Companies don't do that for customers who are a burden
    1. GmAz's Avatar
      GmAz -
      What does he think is going to happen when the iPhone can connect to their 4G network? What a tool.
    1. swifty7's Avatar
      swifty7 -
      no **** we Iphone sprint customers are less of a burden than their 4g customers, Sprint's 3G network data speed is almost next to useless. No wonder we have unlimited useless data plan.
    1. Gopher_Otis's Avatar
      Gopher_Otis -
      Quote Originally Posted by swifty7 View Post
      no **** we Iphone sprint customers are less of a burden than their 4g customers, Sprint's 3G network data speed is almost next to useless. No wonder we have unlimited useless data plan.
      This is correct. I did a speed test on my aunt's Metro PCS Samsung phone and my Sprint iPhone 4 at (basically) the same time yesterday. Metro was slightly faster.
    1. Hillefied's Avatar
      Hillefied -
      Quote Originally Posted by quidam_brujah View Post
      According to AT&T, iPhone customers are a huuuuuge burden on their network. So much so that legacy 'unlimited' subscribers need to be throttled.
      The iPhone 4S for AT&T uses the dual antenna on HSPA+ which quadruples the bandwidth of AT&T's 3G network. I've seen my bandwidth speeds as high as 600KB or around 5Mb/sec in optimum locations which is actually about 5 times the speed of 3G in the same location.

      I can conceivably see AT&T's bandwidth struggle (if such a thing exists). However, I still feel that AT&T is looking for revenue by forcing capped Data plans on unlimited data consumers and charging for overages.
    1. stevech's Avatar
      stevech -
      Quote Originally Posted by GmAz View Post
      What does he think is going to happen when the iPhone can connect to their 4G network? What a tool.
      i have the same question.