Sprint Seeking $7B to Cover iPhone, Network Upgrade Costs
Top message: Bail out!!!! by glinc
Replying to: Re: Bail out!!!! by BigRed75
They overpaid
The problem is that they overpaid for the iPhone, just to break even they are going to have to practically double their customer base or they are going to have to really price gouge iPhone customers and hope that doesn't force them to leave to another network.
If this was 2006 and they had just signed a deal to make Sprint the exclusive iPhone carrier in the US, this would probably work out. But they are now one out of three, and the deal isn't that great.
Right now, it just isn't smart for Sprint to sign a deal which they KNOW will cause them to continue to lose money for the next 3 years before they break even.
If you have huge cash reserves, you cash reserves, you can afford to adopt a strategy of short term losses, when you haven't turned a profit in years, you can't tell investors 'hey, we signed a deal that pretty much guarantees we're gonna lose even more money for the next few years'....
If this was 2006 and they had just signed a deal to make Sprint the exclusive iPhone carrier in the US, this would probably work out. But they are now one out of three, and the deal isn't that great.
Right now, it just isn't smart for Sprint to sign a deal which they KNOW will cause them to continue to lose money for the next 3 years before they break even.
If you have huge cash reserves, you cash reserves, you can afford to adopt a strategy of short term losses, when you haven't turned a profit in years, you can't tell investors 'hey, we signed a deal that pretty much guarantees we're gonna lose even more money for the next few years'....
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