Prior to the iPhone 4S’ release last October, Sprint didn’t have iPhone users on their network. Now that Sprint does have iPhone 4S users (and likely iPhone 5 users when that device comes out), it seems Sprint is quite eager to keep them…..or at least that’s what Sprint CEO Dan Hesse indicated in a recent interview with Mobile World Live.
According to Hesse, Sprint likes their iPhone users for two reasons: loyalty and data usage. Whereas their Android counterparts use a lot of data (particularly on the 4G network), iPhone users typically use less data on average.
“iPhone customers have a lower level of churn and they actually use less data on average than a high-end 4G Android device. So from a cost point of view and a customer lifetime value perspective, they’re more profitable than the average smartphone customer,” Hesse told Mobile world.
The fact that iPhone users seem to be so loyal and consume less data than others is very important for Sprint. Sprint, as you might recall, invested $20 billion to purchase 30.5 million iPhones over four years, so if the iPhone customers weren’t so loyal Sprint would be losing a lot of money on the deal. Instead, it appears that they’re profiting rather handsomely from it, with a very solid amount of new customers thanks to the addition of the iPhone 4S to Sprint’s network last fall.
It’s also good that the iPhone users on average consume less data. As we’ve seen recently, data consumption is a very real problem for many cell phone companies, with AT&T and Verizon forced to offer reduced data plans as a result. Sprint currently is the only company with an unlimited data plan, and if they hope to keep it this way, they’ll can’t afford for their users to consume a lot of data.
However, we think this might change with the iPhone 5, as the device is expected to get 4G LTE and as most know, 4G LTE usually results in higher data consumption.