Sprint (NYSE: S) is reaping the rewards of its December promotion in which the company offered to cut customers' bills in half if they switch from Verizon Wireless (NYSE: VZ) or AT&T Mobility (NYSE: T) and buy a new Sprint phone. Speaking Wednesday at the 2015 Citi Global Internet, Media & Telecommunications Conference, Sprint CEO Marcelo Claure said that in the fourth quarter the company had a total number of net adds approaching close to 1 million. This compares to the fourth quarter of 2013, when the company added just 477,000 new subscribers.
Claure added that about 400,000 of those new subscribers were prepaid net adds, which surpasses T-Mobile's fourth-quarter prepaid net adds. Today, T-Mobile said it had 266,000 branded prepaid net adds in the fourth quarter.
However, Claure admitted that Sprint still has the highest churn in the industry and said the company is working hard to combat that problem. He said that December was a very strong month for the company and that Sprint dramatically reduced its customer losses.
He added that Sprint will be extending its popular "cut your bill in half" promotion for the rest of 2015 and will be focusing its marketing messaging around that offer. "It has been extremely successful," he noted, adding that the advertising message is simple. "We are going to get away from gigabytes or 'my network is better than your network.' Come over and cut your bill in half."
Claure also responded to critics of Sprint's network by saying that where the company has deployed its Spark service, which combines 800 MHz, 1.9 GHz and 2.5 GHz LTE transmissions, the company's network is getting great reviews from independent third-party monitoring services like Root Metrics. In fact, Claure said that in Chicago Sprint's network is rated No. 2 after Verizon as the most reliable network.
Interestingly, Claure said that the Sprint management team is evaluating the company's 2.5 GHz spectrum holdings and may look at selling some of that spectrum. He said that based upon the money being generated by the AWS spectrum auction, the company is re-evaluating its spectrum holdings. "It wasn't something we had thought of before, but if you look at what we can do with technology [such as carrier aggregation and LTE-TDD technology] to make 2.5 GHz feel like 1.9 MHz spectrum, you can see the value of the Sprint spectrum," he said.
However, he added that this was very preliminary and the company is just in the early stages of looking at this opportunity for monetizing that spectrum.
Claure also praised the company's device leasing program, calling it a disruptive trend for the industry. The iPhone for Life program offers customers a 30-month lease and reduces the monthly cost of the iPhone to $18 for the 16 GB iPhone 6 or $23 for the 16 GB iPhone 6 Plus. Claure said that leasing devices reduces the total cost of ownership of the device but allows the company to sell the existing device that the customer trades in on the secondary market. "It allows us to look at the market differently," he said.
In other news, Sprint today said it has secured three new vendor financing deals for 2.5 GHz network gear totaling $1.8 billion. The deals include an $800 million agreement with Nokia (NYSE:NOK) Networks maturing in June 2021; a $750 million deal with Samsung maturing in December 2022; and a $250 million deal with Alcatel-Lucent (NYSE: ALU) that will mature in December 2021.
Sprint also expanded its credit relationship with Export Development Canada by $300 million and amended the terms of its existing secured equipment credit facility.
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