Leading wireless provider, Sprint Corporation (S - Free Report) announced that it will launch Samsung Galaxy Mega on its network in late 2013. The company expects the new device to support its unlimited 4G LTE data plans and thereby, remain accretive to its data revenues.
Sprint has a rich collection of smartphones including Android, tablets, USB modems, hotspots and routers, all of which are performing well in the market. Smartphones represent 86% of the Sprint platform’s post-paid sales. In Jun 2013, the company launched 4G LTE based Windows Phone 8 smartphones – HTC 8XT and Samsung ATIV S Neo under a two-year contract plan. Sprint activated over 1.4 million Apple Inc.’s (AAPL - Free Report) iPhones in the second quarter, 41% of which belong to new customers. Over the long term, the company expects iPhone to generate $7–$8 billion in profits with the addition of 1–1.2 billion gross subscribers, adding $6–$6.8 billion in profitability.
Overall, the company sold around 5 million smartphones in the second quarter. In addition, the company also remains successful in launching its first tri-band LTE data device that uses LTE on 800 megahertz, 1,900 megahertz and 2.5 gigahertz. The device will be available for sale in late 2013. Further, Sprint in collaboration with U.S. based IT and telecom infrastructure provider, A&T Systems has received a mobile services contract from the U.S. Department of Veterans Affairs under which it will offer an array of wireless devices. We believe continued growth in smartphone penetration will foster ARPU improvement on the Sprint platform as well as result in lower churn rates given the contract package that sells along with these smartphones.
Moreover, the company has entered into lucrative deals with other U.S. carriers like United States Cellular Corporation (USM - Free Report) for gaining more spectrum.In Nov 2012, Sprint struck a $480 million acquisition deal withU.S. Cellular. The agreement entailed the sale of U.S. Cellular’s Chicago, St. Louis, central Illinois and Midwest markets to Sprint. In addition, the deal incorporates the handover of personal communications service (PCS) spectrum and approximately 585,000 customers, accounting for about 10% of U.S. Cellular's customer base.
The transaction was closed in the second quarter. For Sprint, the agreement means more spectrum that will support its Long Term Evolution (LTE) coverage and services in key markets like Chicago and St. Louis. The company received 20 MHz of spectrum that would support its 1900 MHz band in Chicago and other markets, and 10 MHz of bandwidth in the St. Louis market.
Sprint Corp., which operates with other telecom player like AT&T Inc. (T - Free Report) in the U.S. market has a Zacks Rank #3 (Hold).