Sprint Nextel (NYSE:S) is investigating reports that some Apple (NASDAQ:AAPL) iPhone 4S customers on its network have been experiencing slower-than-expected data speeds, a senior Sprint executive said. The carrier is working with Apple on the issue but does not yet have a solution, according to Fared Adib, vice president of product development for Sprint.
Sprint users are complaining of sluggish iPhone speeds.
"We're taking the reports of problems from a small number of customers seriously," Adib said in an interview with CNET. "There's nothing of significance to report yet."
Since Sprint started selling the iPhone Oct. 14, there have been a number of reports from Sprint customers that their iPhones were experiencing unusually slow data connections on Sprint's CDMA EV-DO data network. The problem is a hot topic on Sprint's support message board, with more than 1,200 responses and 235,000 views. Adib told CNET that the complaints represent a single-digit percentage of the base of Sprint's iPhone 4S customers.
Adib told CNET that Sprint is having a difficult time replicating the issue on its own, which makes it more difficult to diagnose the cause of the problem. He said when Sprint finds a solution it will let customers know quickly.
Sprint executives said during the company's third-quarter earnings call that they expect the iPhone to account for 20 percent to 40 percent of Sprint's postpaid gross additions and upgrades during the company's four-year, $15.5 billion contract with Apple. Sprint executives said the contract is subject to a variety of factors including the number of models offered, and that Sprint expects to "outperform" that contract.
Sprint's other major investment area is its Network Vision network upgrade, which includes a transition to LTE by mid-2012. Sprint plans to spend around $10 billion in 2012 and 2013 deploying Network Vision and LTE as well as maintaining its legacy wireline and wireless operations. At the same time, Sprint has said it will save $10 billion to $11 billion in operating expenses and capital expenditures from 2011 to 2017, including $4 billion from shutting down iDEN service.
Speaking at the company's developer conference in Santa Clara, Calif., Sprint CEO Dan Hesse took note of the investments.
"They are going to be a big cash drain," he said, adding that both are necessary investments. "Having a great network is just table stakes to being a great wireless company. We are going to do what it takes."
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