Sprint Nextel (NYSE:S) expects to offer unlimited data service for Apple's (NASDAQ:AAPL) LTE-compatible iPhone 5 when it comes out this fall, that is, if the rumored iPhone 5 actually launches and if Sprint gets it.
"When the iPhone 5 comes out, if we get it and when we get it, we'll offer unlimited (data)," Steve Elfman, Sprint's president of network operations, confirmed in an interview with Investor's Business Daily.
"I don't see a scenario where Sprint won't get an LTE-capable iPhone at the same time as Verizon (NYSE:VZ) and AT&T (NYSE:T)," said Bernstein Research analyst Craig Moffett, in the article. "The problem is they will be so far behind in their LTE network when the iPhone 5 comes. AT&T and Verizon will be much further along, with much better spectrum, offering higher speeds. That could make a Sprint iPhone a tough sell to consumers, especially if LTE capability is the cornerstone feature of the next iPhone."
Sprint has specified a July 15 launch date for LTE service in Atlanta, Dallas, Houston, Kansas City and San Antonio. Verizon's LTE network already covers more than 300 cities, while AT&T's LTE service is available in 41 cities. Sprint said it expects to have largely completed the build-out of its high-speed LTE nationwide network by the end of 2013, when the network will cover some 250 million people.
Though Sprint is playing catch-up in LTE, it might yet stand to benefit from an unlimited LTE data package for a new iPhone. "Sprint could see increased market share from its differentiated LTE unlimited offering," Macquarie analyst Kevin Smithen said in a report.
Sprint began selling iPhones in October 2011, following AT&T Mobility, which has carried iPhones since their initial launch in 2007, and Verizon Wireless, which has carried them since February 2011. In the first two quarters that it carried the iPhone, Sprint sold only 3.3 million of the devices while AT&T racked up 11.9 million iPhone sales and Verizon Wireless activated 7.5 million.
Sprint agreed to pay Apple $15.5 billion over four years to carry the iPhone and has said its iPhone business will not turn a profit until 2015. In May, Sprint's CEO Dan Hesse agreed to cut his total compensation by $3.25 million after shareholders balked at his pay package in light of the heavy upfront costs Sprint is paying to carry the iPhone.
Of course, speculation regarding which operators will get the iPhone 5 could be considered quite premature, given that Apple hasn't even confirmed that it will build an iPhone 5 and, if it does, that it will be equipped with LTE capability.
Nonetheless, Investor's Business Daily noted that Wedbush Securities analyst Scott Sutherland issued a report in which he wrote, "We expect the iPhone 5 this fall to include LTE and drive what we expect to be the largest iPhone upgrade (cycle) thus far."
- see this Investor's Business Daily article
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