In the stock market, the wireless carrier Sprint Nextel Corp which happens to be the third-largest wireless service provider in the US announced its results for the fourth-quarter. Wireless services industry watchers have been eager to know Sprint plans related to the iPhone price and the associated wireless services.
What to Expect This Year from Sprint and Apple’s iPhone?
Since it started the contract-based plans, the company has not managed to get sufficient number of subscribers. Such plans are the bread and butter of most wireless carriers. Since 2005, when Sprint joined Nextel, it has been losing money. In fact, it has posted losses in a row for the last 16 quarters.
However, industry analysts are hopeful that with the help of effective iPhone price strategies, Sprint would be able to come out of its negative report of subscriber losses. It was in October when the company started selling the iPhone and it is expected that on the contract-based plans the company would be able to get at least 270,000 subscribers in the near future. Other industry analysts do not expect it would get more than 166,000 subscribers.
While other wireless carriers reported good subscriber base all along, Sprint was able to get subscribers only in the fourth quarter of 2010. Everyone is interested in knowing how Sprint will handle issues related to iPhone prices of the iPhone 4S model and the ever popular iPhone 4 Not to mention, everyone is waiting for the release of the latest iPhone 5 price.
Depending on the handset model selected by the subscriber, the company would have to provide subsidy of hundreds of dollars to bring down the iPhone price to $100 or $200. The company also estimates that in next four years it may have to spend $15.5 billion in buying the iPhone handsets.
The company will have to spend heavily to make its network 4G-compliant. For the 4G services, it has purchased network access from Clearwire. However, the selected technology is quite old and both the Sprint and Clearwire would have to spend heavily to upgrade to the new technologies needed for this venture.
What it means is that the company may not make money this year or even into 2013. The company is sure to benefit from the cancellation of AT&T bid to buy the T-Mobile which is the fourth largest wireless carrier in the US. The move was vehemently opposed by Sprint, and finally even the regulators did not allow the deal to go through. Now the industry is trying to figure out how to move up. There have been rumors about T-Mobile and Sprint sharing network resources to overcome high costs of upgrades.
Why the Sprint and Its IPhone Price Strategy Matters?
The company has almost 53 million subscribers who use its wireless services. The strategies that the company uses to keep those subscribers affect the future planning of other carriers as well. Majority shares of Clearwire, which has been trying to build a wireless broadband network across the nation, are already owned by Sprint.
In some surveys, wireless industry analysts have said that they expect revenue of $8.7 billion for the Sprint. They also expect the company to make a loss of 38 cents for every share. Sprint has to figure out the iPhone price, technology upgrade and other issues. Recently the company posted the revenue of $8.3 billion and $929 losses that amount to about 31 cents for every share.