Sprint CEO hints at price hikes ahead of iPhone 7
The promotion, which promises to cut your existing rate plan at a competing carrier in half, has been a hit with consumers. The nation's fourth-largest wireless carrier said it added 173,000 post-paid customers, or folks who pay at the end of each month, in its fiscal first quarter that ended June 30. That figure marks a reversal from a loss of 12,000 customers a year ago.
But the half-off promotion isn't sticking around forever, according to Sprint CEO Marcelo Claure, who hinted at price increases later this summer.
"You can expect us to come up with a new set of rate plans before the next iPhone," Claure said Monday on a call with journalists. New iPhone typically arrive in mid-September.
While the recent promotion has gotten people looking at Sprint again, Claure's comments underscore the hefty cost the company has paid. The company posted a loss of \\$302 million in the period, wider than the \\$20 million it lost a year ago. Still, the promotion was necessary to get people interested in Sprint, which continues to rebuild its reputation after years of poor wireless service.
Claure didn't specifically say that there would be price increases, only noting that he was "going to add things that generate shareholder value." What Wall Street likes isn't usually what consumers like.
He wouldn't provide much detail, only teasing that it would be "game changing" and another aggressive move.
New prepaid plans coming
Claure also addressed the company's prepaid business, which lost 331,000 customers in the period. Sprint, which runs both Virgin Mobile and Boost Mobile, has traditionally been a strong player in this area. Over the last few quarters, Sprint has stumbled as T-Mobile's MetroPCS and AT&T's Cricket Wireless have won over budget-conscious consumers. Claure said some of its losses occurred in Sprint's "lifeline" business, which offers cheap, government-subsidized prepaid service to individuals with low incomes.
At the same time, Claure teased a revamp of Virgin's plans in September. "It's a complete overhaul of Virgin," he said. "It's a revolutionary approach on how people procure prepaid and the type of devices they can get."
On Verizon and Yahoo
While Sprint reported earnings, rival Verizon announced Monday that it is scooping up Yahoo for \\$4.83 billion. Claure applauded Verizon's move to compete against internet players like Google and Facebook, but noted that history has shown it's difficult for carriers that try to leave their comfort zone in the telecom business.
Verizon, for its part, believes Yahoo will help it become more of a global media business and bolster its burgeoning digital ad business.
Sprint sees it as an opportunity to take away post-paid customers from Verizon.
"We like when our competitors take their eyes off of their core business," Claure said.
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