Feb 07, 2013 (07:02 AM EST)
Sprint Sells 2.2M iPhones, Still Loses $1.3B

Read the Original Article at InformationWeek

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Sprint's full year and fourth-quarter results for 2012 show a company mired in transition. The nation's third-largest wireless network operator lost $1.8 billion for the year on $35.3 billion in annual revenue. It lost $1.3 billion during the fourth quarter on $9 billion in sales. Sprint blamed the results on accelerated depreciation costs, Superstorm Sandy and the ongoing costs associated with its Network Vision project.

Among the highlights for Sprint were sales of Apple's iPhone. It moved 6.6 million Apple smartphones during 2012, with 2.2 million of them sold during the fourth quarter alone. According to Sprint, 38% of those 2.2 million iPhone customers -- about 836,000 -- were new to Sprint. A staggering 89% of its postpaid sales were smartphones. Sprint operates several prepaid brands, including Boost Mobile and Virgin Mobile USA.

Sprint continues to bleed iDEN customers. It lost 644,000 Nextel customers during the quarter, in addition to 376,000 Boost Mobile customers. According to Sprint, it was able to convert, or "recapture," 521,000 of those departing customers by signing them up to its CDMA-based services. There still remain 2.1 million customers on Sprint's iDEN network, however. Sprint is shutting iDEN off completely by June 30. Sprint needs to "recapture" the bulk of those customers, rather than the 51% it managed during the fourth quarter.

[ Want more about Sprint? Read CES 2013: Sprint Finally Commits To Windows Phone 8. ]

The company desperately needs the spectrum used by its iDEN network to expand the reach and availability of its CDMA and LTE networks. Sprint's CDMA business added 401,000 contract customers and another 525,000 prepaid customers via Virgin Mobile. The company netted a loss of 337,000 for the quarter, giving it a total subscriber base of 55.6 million. By comparison, AT&T and Verizon each have about 100 million subscribers.

One of the big problems being faced by Sprint is its slow-moving transition from WiMax 4G to LTE 4G. The company is re-farming its iDEN spectrum and will eventually use Clearwire's 2.5GHz spectrum -- if its attempt to purchase Clearwire is ever approved -- for LTE. The project, which Sprint calls Network Vision, is a costly one. According to Sprint, it has 19,500 cell sites ready for construction. More than 8,000 are already on the air.

Sprint says that it has launched 4G LTE in 58 markets, though many of them are small markets. It will expand LTE to a total of 170 markets in the "coming months." The company believes it will cover 200 million people with LTE by the end of 2013 or early 2014. In contrast, Verizon Wireless's 4G LTE network build will be 100% complete by the middle of this year and AT&T's will cover 250 million people by the end of the year.

As slow as Sprint's LTE build is going, it's ahead of T-Mobile, which only offers LTE in one market, Las Vegas.

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