Sprint is dangling the promise of a free iPhone 6s and discounted iPads for customers willing to add a new line of service
Sprint is again tapping the allure of Apple devices in trying to garner attention from consumers. The carrier said beginning today it’s offering a buy one, get one free deal on Apple iPhone 6s and 6s Plus models. “Well-qualified” customers looking to take advantage of the deal must add at least one new line of service and an eligible upgrade, and can take advantage of the carrier’s 24-month installment plan or its 18-month leasing offer. The monthly credit will apply to the lower-cost device.
Sprint is also offering $200 discounts on Apple iPad models for customers selecting to lease or make monthly payments on an iPhone 6s or 6s Plus smartphone. The offer is good towards the iPad Mini 4, iPad Air 2, iPad Pro 9.7 and iPad Pro 12.9 when purchased on a 24-month installment plan.
The carrier initially ran a $1 per month promotion on the iPhone 6s when the device launched last fall, though it required customers to trade in a previous generation iPhone 6 model to get the deal as well as sign up for its iPhone Forever lease program. The $1 offer was in response to T-Mobile US offering the iPhone 6s for $5 per month as part of its JUMP on Demand program.
Sprint managed to score 22,000 direct postpaid phone net additions for its fiscal fourth quarter ended March 31. The results were significantly lower than the 877,000 net phone additions posted by T-Mobile US, but did manage to outscore phone connection losses posted by Verizon Wireless and AT&T Mobility.
At least one financial analyst has questioned Sprint accounting practices linked to its device leasing program. Earlier this year, Craig Moffett of MoffettNathanson said the carrier sourced 71% of its earnings before interest, taxes and depreciation from “accounting distortions” during the fourth quarter of 2015, which while following the rules, created misleading financials.
“I’ve never seen anything like this in my career,” said Moffett. “Not just in this sector, but in any sector.”
Moffett said the accounting distortions started when carriers moved to device financing instead of subsidized pricing, and he said Sprint’s financials became even further divorced from reality when the carrier started leasing devices.
“Things really went off the rails when Sprint started doing leasing and I wouldn’t be surprised to see others start doing leasing because of the distortion, or benefit, that Sprint has gotten,” said Moffett. “On an as-reported basis, Sprint looks like it’s growing EBITDA at just under 30% and it looks like it’s trading at 5.7-times EBITDA, not an unreasonable number. But if you adjust for all the accounting nonsense, Sprint is actually growing EBITDA at negative 30% and it’s actually trading at 12-times EBITDA.”
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