) recently announced the launch of HTC One Max on its network
this week. The new phone features a 5.9-inch display and a
Snapdragon 600 processor, and operates on
) Android 4.3. We believe that this addition to Sprint's product
portfolio will add to its service revenues and accelerate the
demand for its LTE services.
Sprint has a rich collection of smartphones including Android,
tablets, USB modems, hotspots and routers, all of which are in
vogue. Smartphones represented 92% of Sprint's post-paid sales in
the third quarter. Recently, the company also announced that it
will offer Samsung Galaxy Mega on its network attracting
customers to its 4G services. Sprint also activated over 1.4
) iPhones in the third quarter, 40% of which belong to new
Over the long term, the company expects iPhone to generate
$7-$8 billion in profits with the inclusion of 1-1.2 billion
gross subscribers $6-$6.8 billion in profitability. Overall, the
company sold around 5 million smartphones in the third quarter.
Further, Sprint in collaboration with A&T Systems - a
U.S.-based IT and telecom infrastructure provider -has received a
mobile services contract from the U.S. Department of Veterans
Affairs under which it will offer an array of wireless devices.
We believe that continued growth in smartphone penetration will
foster average revenue per user (ARPU) improvement on the Sprint
platform as well as result in lower churn rates given the
contract package that is sold along with these smartphones.
Inaddition to smartphones and other equipment, the company is
also focusing on improving its service plans with value added
data plans that can accelerate post-paid wireless subscriber
growth and ARPU with an improving churn rate. With regard to
prepaid, Sprint's multi-brand like Boost Mobile, Assurance
Wireless and Virgin Mobile as well as innovative offers like $50
Monthly Unlimited plan with Shrinkage, Beyond Talk plans and
Broadband2Go are contributing significantly to subscriber growth.
Additionally, the company started offering the popular iPhone
through its no-contract prepaid Virgin Mobile brand and WiMAX
service via both prepaid Virgin and Boost Mobile. The company
also offers Unlimited Guarantee plan for unlimited data at $30 a
month on smartphones and $10 per month on other phones including
voice and text service at $50 on first connection.
In the third quarter, Sprint registered a surge in its service
revenues thanks to the introduction of pricing plans such as
Unlimited, My Way and My All-In plans that include unlimited
talk, text and data while on the Sprint network. In addition, the
company has also gained from its plan, Sprint One Up, which
offers unlimited talk, text and data along with smartphone
upgrade in every 12 months.
Sprint, which operates with mega telecom companies like
Verizon Communications Inc.
has a Zacks Rank #3 (Hold).
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