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Sprint CEO sees iPhone as 'quite profitable' by end of 2015

updated 03:25 pm EDT, Wed May 16, 2012

$15.5 billion commitment seen as too much by some shareholders

Sprint's deal with Apple for the iPhone will ultimately prove "quite profitable" for the carrier, said CEO Dan Hesse during a company shareholder meeting on Tuesday. The pact will end up costing $15.5 billion by the end of 2015, which has prompted some worried shareholders to challenge it. Hesse in fact recently returned $3.25 million in personal compensation back to Sprint when it was pointed out that the company hadn't factored in the impact of the iPhone before tallying worker bonuses.

At the shareholder event, the CEO claimed that he and the rest of the company are "very happy" with the iPhone deal. "We believe in the long term," he elaborated. "And over time we will make more money on iPhone customers than we will on other customers."

While carriers are believed to pay high subsidies to Apple for each iPhone they sell on contract, recurring voice and data fees are typically high enough to turn a profit within a year. Sprint may have also felt that it needed the iPhone to survive, since it was previously bleeding subscribers to AT&T and Verizon, which already had the device. iPhone users also allegedly consume less data than ones with Android devices.

by MacNN Staff



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