Sprint reports quarterly net loss of $643 million, sees iPhone sales drop by a third
Sprint managed to lose a million customers and over a billion dollars last quarter. This time it's not quite as bad, with a net loss of $643 million on revenue that was broadly equivalent to the same quarter of last year (around $8.8 billion).
Context & Ripple Effects
Sprint's operating pressure predates this quarter: it recorded a $1.4 billion Q2 2012 loss despite selling 1.5 million iPhones, then reported a wider Q4 loss as more than a million subscribers left, largely from Nextel. The latest result adds weaker iPhone demand to an established retention and profitability problem.
First-order effects
- Sprint's $643 million loss and lower iPhone sales weaken the case that flagship-device demand is offsetting subscriber losses and sustaining its revenue base.
Second-order effects
- Sprint's LTE rollout, including the period in which more than a million subscribers departed, carries greater commercial weight: network availability must help retain customers as handset sales soften.
Third-order effects
- If losses, departures and declining iPhone sales continue together, Sprint's handset strategy will be judged less on device availability than on whether it can stabilize its subscriber base through its network transition.
The trend: U.S. carrier competition is putting greater emphasis on retaining subscribers and pairing device demand with credible network improvements, rather than relying on flagship phones alone.