Sprint: iPhone Users Are Cash Cows, Don’t Fully Utilize Unlimited Data

Sprint was recently under fire for betting the bank on the iPhone. The huge costs incurred have forced Sprint CEO Dan Hesse to qualify the addition of the iPhone to its lineup.

Sprint iPhone 5 users ‘more profitable’ than Android

According to a statement made by Hesse in an interview with Mobile World Live, besides a low churn rate, iPhone users actually consume less data on average than other smartphone customers like those using high-end 4G Android devices. With lower bandwidth usage while still paying for the same unlimited data plan, this in turn equates to lower operating costs and thus higher profit margins for Sprint:

“So from a cost point of view and a customer lifetime value perspective, [iPhone customers] are more profitable than the average smartphone customer,” said Hesse.

It was recently reported that Sprint’s February 10-K report showed the company planned to exceed the $15.5 billion minimum purchase agreement with Apple despite a drop in wireless profits due to the higher subsidy cost which is affecting US carriers in a big way.

With the New iPhone 5 rumored to launch sometime this summer and expected to come equipped with LTE which Sprint is currently building, it will be interesting to see if Hesse’s reasoning still applies.

[source]