Even though selling the iPhone can potentially bring carriers a huge influx of new customers, selling Apple’s treasured phone isn’t cheap. Before they were able to bring the iPhone to their network, Sprint had to give Apple $15.5 billion in committed purchases for four years, which sounded pretty crazy at the time.
In a recent interview, Sprint CEO Dan Hesse explained that committing to the iPhone was a huge risk, but ultimately, betting against Apple could have been disastrous.
Relaying Sprint’s predicament of being one of the only American carriers without the iPhone, Hesse said,
“You really don’t want to be on the outside. The No. 1 thing was getting the call from Apple that they were interested in at least having the opportunity [to sell the iPhone]. We committed to $15.5 billion over four years in purchases. That’s a large commitment. [But ultimately] we saw no reason to bet against Apple. Today, looking back, I think it was the right decision.”
So far it’s been paying off for Sprint, which views the $15.5billion as a long term investment to keep their customers happy. Another risk Sprint had to take was the decision to build out their WiMax network before Verizon launched LTE.
Even though WiMax has become the least used of 4G technologies, Sprint faced the decision of being last to LTE because they don’t have enough free spectrum, or being the first carrier to launch a 4G network even though it might not become the US standard.
Sprint went ahead with plans for WiMax has been another key to keep longtime customers happy. Now, if only they could get a fancy new iPad on their network they’d be set to really compete against AT&T and Verizon.
- Source All Things D