Sep 24, 2020
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How Does Sprint Make Money?

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The Sprint logo is seen outside a shop in Washington DC on July 26 2019. – US antitrust. [+] AFP VIA GETTY IMAGES Sprint (NYSE: S) primarily provides services on a postpaid and prepaid payment basis to retail subscribers including the sale of wireless services that utilize the Sprint network. It also provides wireline services to other communications companies and targeted business customers


In this analysis we break down the major drivers of the company s revenues. View our interactive dashboard analysis Sprint Revenues: How Does Sprint Make Money? What Are Sprint s Key Business Segments? 1. Services (expected to contribute 68% of fiscal 2020 (year ending March 2020) revenue): Revenue is generated from postpaid and prepaid subscribers reckoning on the type of service used by them including fixed monthly recurring charges variable usage charges and miscellaneous fees including activation fees and roaming


2. Equipment Sales (17% of 2020 revenues): Devices are sold to customers through installment billing and subsidy programs. 3. Equipment Rentals (15% of 2020 revenues) : Qualified subscribers can lease a device for a contractual period of time. At the end of the lease term subscribers be able to come the device continue leasing the device or purchase the device


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A New Partnership Aims To Help Technology Companies: Microsoft Google Apple. Cable Companies: Comcast s Xfinity Mobile and Charter s Spectrum Mobile. What Is The Basis of Competition? Competition is according to wireless plans that come with voice calls spectrum resources wireless content distribution and broadband services. Sprint s Total Revenue has grown slightly from $33


3 billion in FY 2017 to nearly $33. 6 billion in FY 2019 but is expected to decline by a similar percentage to $33. 2 billion in 2 years TREFIS (1) Revenue from Service Channel could decline about $1 billion in the next two years with its share of Total Revenue expected to be about 66% by 2021 Overall Services revenue declined from $25


4 billion in fiscal 2017 to $22. 9 billion in fiscal 2019 driven by lower retail postpaid and prepaid revenues. We expect revenue to decline by ~1 billion in the next two years to about $21. 8 billion in fiscal 2021 driven by a fall in average revenue per user for postpaid and prepaid subscribers


Services sales contributed 68% of total revenue in fiscal 2019. Though this share is expected to head down to 66% in fiscal 2021 it’s still expected to contribute a large part of the company s revenue. (1. 1) Postpaid Revenues Could Decline 6% In Next Two Years At the Back of Growing Competition (1


2) Prepaid Revenues Could Remain Flat Over the Next Two Years A lower ARPU would be driven by a rise in subscribers on discount plans and promotional activities. Mounting competition particularly with equipment promotions by competitors could hurt the subscriber s growth. However we think postpaid and prepaid subscriber growth to stabilize with the hot commercial 5G launch announcement


What s behind Trefis? See How It s Powering New Collaboration and What-Ifs For CFOs and Finance Teams| Product R&D and Marketing Teams More Trefis Data Like our charts? Explore example interactive dashboards and create your own

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