April 28, 2011 | by Andrew Kameka
Sprint reported it’s Q1 2011 earnings today, and the Kansas City-based carrier revealed some respectable numbers, thanks in part to its Android phones. Sprint reported that it had a net gain of postpaid subscribers (contracts) of 310,000, and had a churn rate of 1.81 percent, which is the best quarterly performance the company has had in 5 years.
How the heck did they manage that?
One would assume that without a major phone release in the past three months to drum up excitement, Sprint would have lost thousands of customers as AT&T rolled-out the Atrix and Verizon introduced the iPhone. However, Sprint managed to survive a mass exodus, despite CEO Dan Hesse confirming that Verizon’s introduction of the iPhone definitely had an impact on the number of customers it was able to attract or retain.
It seems that Sprint’s performance was boosted by the success of its unlimited plans and customer satisfaction with their current devices. People often assume that an exciting new device can draw customers away from their existing carrier; however, in the absence of a new smartphone to grab headlines, Sprint still managed to have an 80 improvement in year-over-year performance. That success should probably be attributed to the more affordable unlimited plans that Sprint introduced last year.
Dan Hesse said that AT&T and T-Mobile became aggressive in pricing as a result of Sprint’s plans, and also suggested that the introduction of a 4G WiMax network pressured Verizon to accelerate its 4G LTE roll-out. He remained confident that Sprint managed to survive the competition thanks to its Simply Unlimited plans.
“Even after the $10 charge, our pricing is still very competitive,” Hesse said on an earnings call this morning. “We’re the only [network] that offers truly unlimited data.”
In the past, Sprint has largely credited the HTC EVO 4G with saving the company’s performance. Phones obviously played a critical role in the company’s rebound, but today’s results show Sprint is also managing to keep customers thanks to better options that come with those phones. In Q1 2010, Sprint lost 464,000 subscribers; in Q1 2011, the network lost only 114,000.
The power of Sprint’s offerings will be tested in Q2. Verizon has a slew of new phones on the horizon and has a growing 4G LTE network to put up against Sprint’s 4G WiMax. It may be best to deliver the EVO 3D sooner than later and not rely too much on affordability enticements.