Sprint CEO Dan Hesse stated in a recent Mobile World Live interview that iPhone users are more profitable for the carrier because they use less data than Android users.
“iPhone customers have a lower level of churn, and they actually use less data on average than a high-end, 4G Android device,” said the executive. So from a cost point of view and a customer lifetime value perspective…they’re more profitable than the average smartphone customer.”
Hesse stated that iPhone users also bring the carrier some heavy subsidies, which is another big part of how the company determines the iPhone’s impact on its bottom line.
Sprint spent a reported $20 million to bring the iPhone on board last fall. Other terms of the deal reportedly included Sprint’s purchase of 30 million iPhone units.
In yesterday’s interview, Hesse said that gamble has paid off. During the last few months of 2011 “four out of every 10 iPhones we sold are for new customers,” Hesse said. “That’s roughly double the rate of either of our competitors, so we’re pulling a lot of customers from our competitors.”
Last month, the company reported selling 1.8 million iPhones during the fourth quarter of 2011, and gaining 1.6 million new subscribers during the final quarter of 2012, 539,000 of which were under contract. Altogether, the Sprint serves 55 million customers.
Initially, Sprint was plagued with complaints of slow data speeds when the iPhone first debuted on its wireless network. However, unlimited data usage has been a key selling point for Sprint, Hesse said yesterday — in spite of the fact that iPhone users consume less data than their Android-using counterparts.
“The marriage made in heaven is unlimited (data) plus the iPhone,” he said. “My plan is to continue for as long as we can, hopefully forever.”
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