Despite rivals' discount strategy to attract iPhone lovers to their networks, Sprint could still count 1.8 million iPhone activations, which according to the carrier's CEO Dan Hesse, exceeded the company's expectations.
Unlike, Verizon and AT&T, that offered "unprecedented" iPhone reductions, Sprint officials decided not to join the discount frenzy, that Hesse describes as "unusual, even by traditional seasonality history."
Although the high activation numbers were pleasantly surprising for Sprint, the other two players on the market could show off even more impressive results, as Verizon announced 4.3M iPhone activations, and AT&T managed to convince 7.6 million iPhone owners to use its network.
So the discount strategy wasn't so bad after all. However, as earlier reports show, it is not necessarily a very profitable deal for carriers to include the iPhone in their offering to subscribers.
According to TWICE (ThisWeekInConsumerElectronics), who quote sources inside Sprint, the cost for joining iPhone deal could be quite high, especially after the carrier committed to buying a minimum of $15.5 billion worth of iPhones in four years.
"The costs of subsidizing iPhone sales and costs of acquiring iPhone subscribers was around $630 million during the quarter. iPhone costs and the $54 million in costs to revamp Sprint's network infrastructure reduced the quarter's OIBDA margin by an estimated 8.8 percent points to a reported 10.8 percent," Joseph Palenchar details in his recent report.