Sprint Duels with iPhone’s Dual Burden

by Matt Klassen on October 27, 2011

You might think that finally securing the addition of the vastly popular iPhone to your smartphone catalogue would be a reason for celebration for Sprint, America’s third largest wireless carrier, but early reports indicate that the iPhone is quickly becoming a ravenous two headed monster, gobbling up Sprint’s spectrum and its revenues and leaving only a barren scorched earth in its wake.

Following the recent release of Apple’s new iPhone 4S on Sprint’s network, reports have surfaced that the wireless carrier is struggling to handle both the data load and the financial burden associated with Apple’s premiere device, issues that have led to frustrated customers and worried investors.

According to Sprint, however, these issues are nothing to worry about, simply the natural growing pains associated with the release of such a world class device; short term pains that will eventually lead to long term gains.

It’s a refrain we’ve all heard before, “My wireless carrier is not prepared for my iPhone!” For years the ire of the iPhone world was directed at AT&T, a company well-known for its inability to handle the data load of the popular iPhone, but now in the era of post-iPhone exclusivity the complaint has once again reared its ugly head, but this time directed towards Sprint.

What makes this situation all the more interesting is what company CEO Dan Hesse said about the network strain in a recent conference call:

There is a misperception that our launch of the iPhone will increase the load on Sprint 3G network and require us to spend more 3G capital. The reverse is true. IPhone users are expected to use significantly less data than the typical user of a dual-mode, 3G, 4G device.

While his naivety is surely making some AT&T executives chuckle, this statement is interesting in that it comes the day after a report confirming that Sprint is working in partnership with Apple to alleviate the overwhelming strain on Sprint’s network, an issue that has caused data disruptions and slow transfer speeds for Sprint’s new iPhone users.

According to analysts, the slow data speeds are likely caused by exactly the opposite of what Hesse predicted would happen, that is the overwhelming data usage that is caused both by iPhone users and new smartphone users, two points that have culminated into the first of many iPhone 4S headaches.

Beyond that, however, is the fact that Sprint does not have a HSDPA network, meaning that the iPhone 4S is utilizes the carrier’s plain ol’ 3G CDMA network, ostensibly making it a plain ol’ 3G phone.

Network management aside, it looks like Hesse is working overtime defending his company’s acquisition of the iPhone 4S to worried investors, as the iPhone 4S comes with an incredibly heavy contract, meaning increased costs for Sprint. In defence, however, Hesse has argued that the iPhone’s short term financial hit will turn profitable in the long run, as customers will be drawn to the network leading to increased revenues.

For its part, Sprint can take solace in the fact that it’s certainly not the first carrier to be bitten by Apple’s two-headed iPhone monster, but that will do little to assuage the frustration and fears of iPhone users and investors alike.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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