Sprint Sold 1.8 Million iPhones Last Quarter; Of Which 40% Were to New Customers

Sprint has just announced its financial results for the fourth quarter of 2011. Sprint reports that it sold 1.8 million iPhones in the last quarter, of which 40 percent were new customers.

Sprint started offering Apple's iPhone 4S and iPhone 4 for the first time in October.

Sprint reported a net loss of $1.3 billion, which was due to subsidy for wireless devices that increased to $1.7 billion from $1.3 billion due to the launch of the iPhone 4 and iPhone 4S. The company however viewed the iPhone launch as a success and expects to recover the costs in future quarters.

Apple's iPhone featured quite a bit in Sprint's financial results announcement. Here are some of the snippets:

Sprint Nextel Corp. (NYSE: S) today reported Adjusted OIBDA* of $842 million for the fourth quarter and nearly $5.1 billion for the full year 2011. Wireless service revenues for the fourth quarter increased more than 7 percent year-over-year, driven by Sprint platform postpaid ARPU growth of $3.69 – the largest year-over-year increase on record across the U.S. wireless industry. Strong revenue growth and cost management partially offset the impact of increased equipment net subsidies and sales expense associated with the successful launch of the iPhone^®. Forty percent of Sprint’s 1.8 million iPhone sales in the fourth quarter were to new customers. Based on internal estimates, including incremental costs associated with iPhone sales, the combined impact of iPhone and Network Vision costs reduced fourth quarter Adjusted OIBDA* margin, which was 10.8 percent, by approximately 8.8 percentage points. [..]    

Based on internal estimates, including incremental costs associated with iPhone sales, the combined impact of iPhone and Network Vision costs reduced fourth quarter Adjusted OIBDA* of $842 million by approximately $684 million. [..]      

Approximately 9 percent of postpaid customers upgraded their handsets during the fourth quarter. Upgrades as a percentage of our subscriber base increased sequentially, likely due to the iPhone launch and customers’ expectations of the launch, which depressed third quarter upgrades. [..]

The quarterly year-over-year and sequential increase in net subsidy is primarily due to the launch of the iPhone 4 and iPhone 4S, which on average carry a higher subsidy rate per handset as compared to other handsets. [..]

The quarterly year-over-year decline in Adjusted OIBDA* was primarily due to higher equipment net subsidy and sales expense primarily associated with iPhone sales, and higher cost of service, partially offset by higher postpaid and prepaid wireless service revenues and lower marketing costs. Sequentially, quarterly Adjusted OIBDA* declined primarily as a result of higher equipment net subsidy and sales expense primarily associated with iPhone sales, partially offset by higher postpaid wireless service revenues and lower wireless cost of service. [..]      

Dan Hesse, Sprint CEO had this to say about the results:

“Our strong fourth quarter performance illustrates the power of matching iconic devices like the iPhone with our simple, unlimited plans and industry-leading customer experience. During the past year, Sprint added more than 5 million net new customers and grew wireless service revenue by more than 5 percent, including 17 percent for the Sprint platform. This momentum gives us confidence as we execute our Network Vision upgrade and 4G LTE roll-out."

Sprint is currently the only iPhone carrier in the U.S. that offers unlimited data plan. But it still has some catching up to do as AT&T activated 7.6 million iPhones in the last quarter, while Verizon activated 4.3 million iPhones.

Did you switch to Sprint from another carrier? Tell us your experience in the comments below.