) in collaboration with LG Electronics USA announced that it will
) Nexus 5 on its network on Nov. 8. The device will be available
for $149.99 for the 16GB version after a rebate of $50.00. We
believe that the new addition to Sprint's product portfolio will
add to its service revenues and accelerate the demand for its LTE
Sprint has a rich collection of smartphones including Android,
tablets, USB modems, hotspots and routers, all of which are
performing well in the market. 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 million
) 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 U.S.-based IT and telecom
infrastructure provider, A&T Systems has received a mobile
services contract from the U.S. Department of Veterans Affairs
under which it will now offer an array of wireless devices. We
believe continued growth in smartphone penetration will foster
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 average revenue per user (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 the company's 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 new 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 smartphone upgrade 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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