Sprint on Tuesday was the last of the four major U.S. wireless carriers still offering a free iPhone promotion after remaining rival Verizon finally changed tactics.
At the launch of the iPhone 7, all four U.S. wireless carriers rolled out aggressive promotions that offered the device for free with service credits when customers signed up for an equipment installment or lease plan with a set 18- or 24-month term.
The offers, which essentially brought back the old two-year carrier subsidy model, prompted analysts to sound the alarm bells. The promotions, they said, might be good for churn but could “wreak havoc” on reported EBITDA and margins.
And it seems it didn’t take too long for the offers to fall.
At the end of September – just about three weeks after iPhone 7 preorders began – AT&T and T-Mobile called it quits, ending their free iPhone promotions. That left Verizon and Sprint hanging on in the battle for upgraders.
But Verizon, too, seems to have finally thrown in the towel. The carrier is now only offering the device for $319.99 on a two-year contract or with up to $550 in trade-in credits on a device installment plan.
Sprint’s offer seems to have legs, though, with no end date yet announced. And it could help them down the line.
Unlike offers from the other three carriers that offered the iPhone 7 on an equipment installment plan, Sprint’s promotion focuses on a lease arrangement. This, as previously pointed out by Wells Fargo’s Jennifer Fritzsche, gives Sprint a leg up because it means the carrier can recoup some of the device costs down the road. Those same costs will be unrecoverable by the other carriers since customers will own the devices at the end of the EIP term, she said.
Is this why Sprint’s offer is the last man standing? Or is Sprint desperately trying to mop up the remaining iPhone 7 demand?
Share your thoughts below!