Sprint: We're Ready for the iPhone (but Not Confirming It)
Sprint Nextel (NYS: S) CFO Joe Euteneuer said the carrier's network and business is fully prepared to sell the Apple (NAS: AAPL) iPhone, though he did not confirm the carrier will indeed sell the device.
"Steve [Elfman, president of Sprint's network operations and wholesale,] and his team have been relentless on watching the existing network to make sure that we are spending the capital we need and to make sure we don't create a bad user experience -- irrespective of all the rumors," Euteneuer said, speaking at the Bank of America Merrill Lynch Media, Entertainment & Communications conference. In terms of the demand and network usage generated by selling the iPhone, Euteneuer said, "we're going to stay ahead of it."
TheWall Street Journal in August reported Sprint will sell the next iPhone starting in October. The move would give Sprint even footing to compete with larger rivals Verizon (NYS: VZ) Wireless and AT&T (NYS: T) Mobility, both of which sell the iPhone. During his appearance, Euteneuer wouldn't confirm that Sprint will sell the iPhone, but he discussed the possibility of Sprint selling the device and what it would mean for the carrier.
Specifically, Euteneuer was questioned about Sprint's unlimited data plan, and whether it would unduly strain the carrier's network when coupled with the iPhone.
Offering unlimited data is about "managing the network properly," Euteneuer said. "If we got to a point where we thought that keeping an unlimited plan wasn't going to create the profitable marketplace that we wanted, then we would have to look for change. But we think we have great runway room."
Euteneuer was also asked whether selling the iPhone would put pressure on Sprint's margins.
"It does come with some short term pain on your operating margin," he acknowledged. "But what it does for them [carriers selling the iPhone] is an increasing of their brand and a reduction of churn. The benefits of having such an iconic device are really huge."
Euteneuer also pointed out that Sprint has managed to keep pace with its rivals without the iPhone through devices such as the HTC Evo 3D. But he said customers routinely ask whether Sprint offers the iPhone. Euteneuer said that the addition of the iPhone to Sprint's lineup could help propel it ahead in the market.
"If you could level that playing field [by making the iPhone available to Sprint customers], it just creates a whole other dynamic for this company on a going forward basis irrespective of maybe a short term margin pain you might have to suffer as a result of something like this," he said.
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