Will the iPhone be good for Sprint?

editor's corner

Sprint Nextel (NYSE:S) will reportedly start selling Apple's (NASDAQ:AAPL) iPhone 5 in mid-October, the Wall Street Journal reported earlier this week, and analysts are split as to whether the move will be good for Sprint or not.

While the move would give Sprint an even footing to compete against larger rivals Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T), analysts wonder whether Sprint will kiss its unlimited data plans goodbye given the fact that AT&T and Verizon have discontinued unlimited data pricing plans in the wake of the iPhone. The iPhone, as everyone knows, tends to cause a spike in data traffic.

The key for Sprint is to keep its $79.99 unlimited smartphone data plan as long as possible to have a leg up on Verizon and AT&T, but Sprint must also weigh the cost. Subsidies run high with the iPhone, and so does the cost to transport data over the network.

Still, having the iPhone is a competitive must-have. Both AT&T and Verizon have benefited from the iPhone. Rather than taking business away from AT&T, Verizon has expanded the market for the device. Verizon activated 2.3 million iPhones in its most recent quarter, and AT&T activated 3.6 million. Apple shipped 20.3 million iPhones globally in its most recent quarter, making the company the world's largest smartphone vendor.

The competitive need for the iPhone is recognized by rural operators too. Steve Berry, president of the Rural Carriers Association (RCA),  said the RCA is currently looking at how to leverage the iPhone for rural operators now that Apple is selling an unlocked GSM version.

"Apple announced unlocked iPhone so we're trying hard to get access to that so that our customers access some of the same services," Berry said.  

For more on the challenges and opportunities rural operators face in the LTE market, check out my special report here.--Lynnette