At an investor conference here Wednesday, Robert Brust, Sprint's chief financial officer, warned that the summer is usually the time of year that Sprint and all other U.S. carriers except AT&T feel the sting from a new iPhone launch. For the past three years, Apple and AT&T have launched a new version of the iPhone in June and early July. And customers have left their service on other carriers and flocked to AT&T to get the new device.
Robert Brust, chief financial officer for Sprint Nextel
(Credit: Sprint Nextel)
"Every year all U.S. carriers, except AT&T, go through a little trauma called 'iPhone introduction,'" he said. "We have a little churn issue called 'People leaving to go to the iPhone.' As people's contracts expire they leave and go to AT&T for the iPhone."
But this year, Brust said he is hopeful that the company's first 4G phone, a Google Android device called HTC EVO 4G, will stem some of the losses.
"Our hope is that we won't lose as many customers this year as we have in the past," he said during an interview at the conference.
Brust went on to explain that AT&T's network problems and the new tiered pricing plan the carrier recently introduced for all smartphones and the iPad may give some potential iPhone customers pause. Sprint's CEO Dan Hesse has said the company has no plans to introduce a tiered data plan.
"AT&T has been getting a lot of flack for its network," he said. "People all over the country have been complaining about the service. And they've raised rates for some of their customers. I think they are under a lot of stress right now."
Meanwhile, Sprint has introduced aggressively priced smartphone bundles and it finally has a phone that can take on the iPhone. With its large high-resolution touch screen, 8-megapixel camera, and the ability to turn itself into a Wi-Fi hotspot, Sprint believes the EVO is a compelling competitor to the iPhone even for customers not living in the 4G territory. The Andrdoid-based EVO is also designed specifically for a super fast 4G network, which means applications and video viewing is much faster than on an iPhone when the EVO is used in a 4G network.
Sprint is using Clearwire's 4G wireless network, which it's still building across the country. Currently about 44 million people can access the 4G network. And by the end of the year, Clearwire and Sprint say they'll reach 120 million potential customers.
Sprint tried to stave off defections last June with the launch of the much-anticipated Palm Pre. While the Pre did well in the first days on the market, sales were not even close to iPhone sales. But Burst said the EVO is a much more compelling device than the Pre.
"The Pre was for people who didn't really want the iPhone," he said. "But the EVO is a phone that people can get instead of the iPhone. We were in the distance last year and now we're catching up."
During his presentation at the conference, Brust told analysts that first-day sales of the EVO were strong across the country and not just in 4G areas. He didn't provide specific sales numbers, but he also didn't discuss the company's admission on Tuesday that it overestimated the number of phones sold on Friday.
Initially, Sprint said on Monday that the EVO's first-day sales were three times higher than sales of the Samsung Instinct or Palm Pre on their first weekends. The company later revised that statement saying it had "inadvertently erred" and that the number of EVO sales was equal to the combined three-day sales of the Instinct and the Pre.
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Labels: Apple , HTC , Iphone , Sprint
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