SprintSprint recently released its first quarter 2011 earnings, and based on improving average revenue per user (ARPU) and subscriber addition trends, we believe that the outlook has improved for the company. Its statements suggest solid data ARPU growth: As a result, we have raised our outlook for Sprint (S). Sprint primarily competes with AT&T (T) and Verizon (VZ) in wireless and land line businesses.

Expect Good Data Revenue Growth

Sprint recently increased data charges by $10 per month on new smartphone activations, which it is able to do so because of its improved brand image and customer service, along with a better selection of smartphones. During the company's recent earnings release, management commented:

Postpaid ARPU benefited sequentially from higher monthly recurring charges, primarily related to the $10 premium data add-on charge which we have applied to all smartphones activated since January 30.

....[Smartphones] reached an all-time high of 73% of quarterly CDMA device sales and 54% of the base.

Increased smartphone penetration and improved pricing will help data ARPU. The data business is critical to Sprint because of its high expected growth and good margins.

In our revised estimates, the mobile Internet business constitutes about 46% of Sprint's stock value. We expect data ARPU to continue solid growth and reach about $24 per month by end of our forecast period. Our price estimate for Sprint stock stands at $5.84, roughly 10% ahead of market price.

See our complete analysis for Sprint stock here

Like our charts? Embed them in your own posts using the Trefis Wordpress Plugin.


Increase your money and finance knowledge from home

Reading a Stock Quote

Learn to read the ingredients of a stock.

View Course »

Investing in Startups

The lucrative and risky world of startups.

View Course »

Add a Comment

*0 / 3000 Character Maximum

12 Comments

Filter by:
PJD120

Why would these commentors think Sprint is that bad? Sprint is the cheapest cell phone provider out here now. Oh so you want to go and pay an additional $30.00 a month for data with Verizon and AT&T, and neither one has unlimited everything. Well I don't have 4G so I don't know how that is working for Sprint. But from what they are saying here, Sprint seems to be doing okay. But I guess you all just want to go and run to be with Verizon and AT&T I guess. Sad.

May 09 2011 at 8:12 AM Report abuse rate up rate down Reply
Ralph

stop making phone do more and get more coverage

May 09 2011 at 1:20 AM Report abuse rate up rate down Reply
Bidgie818

To Sprint: Block spam & unsolicited emais and continue to improve & charge less to attract new customers & maintain current ones. Thanks!

May 08 2011 at 5:30 PM Report abuse rate up rate down Reply
suprg1969

Oh lets not forget they have some of the worst management in wireless in my opinion. AT&T and verizon will crush Sprint!

May 08 2011 at 4:27 PM Report abuse rate up rate down Reply
suprg1969

Sprint has horrible coverage and worse customer service. It is driving Nextel, virgin mobile and Boost into the ground. I can't tell you how many of their customers I steal each day. I love sprint

May 08 2011 at 4:26 PM Report abuse rate up rate down Reply
johnguthrieyates

Well the really good news is that the FCC doesn't understand their job function so they will approve AT&T T Mobile and then a Verizon Sprint deal. We'll finally have the Exxon and Chevron of the wireless ... so much for competition. Thanx FCC ... Thanx SEC ... Thanx Justice Department

May 08 2011 at 1:07 PM Report abuse rate up rate down Reply
playpffmk1

I hope Sprints great CEO sees how his people who work for him are screwing everyone. He better be reading comments or someone telling him. wish i had his e-mail so i could tell him, and that his commericals are lies..

May 08 2011 at 1:00 PM Report abuse rate up rate down Reply
playpffmk1

lol, you know why Sprint is doing so good, their ripping their customers off. I use to tell everyone how good they are,lol..what a joke now. They have screwed me on my bill for the past 4 months,over chargeing me for my internet,in which i had unlimited. This is not the first time, when are us the people going to beable to fight back when carriers break contracts? They fine people for leaving,but we can't do anything when they rip us off. Sprint pulls this junk every spring and in NOV. I have never been late on a payment and this is how they treat people. So take Sprints outlook and you know where to put it.

May 08 2011 at 12:55 PM Report abuse rate up rate down Reply
budwsr25

If anyone else wants to join post it here.

May 07 2011 at 8:49 PM Report abuse rate up rate down Reply
budwsr25

When every sprint tower is transmitting at 4G then they would be worth it. I am looking into a class action lawsuit because I know many people who can't use their phones the way they were designed.

May 07 2011 at 8:47 PM Report abuse rate up rate down Reply