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If this actually occurs, the duopoly claimed by Verizon and AT&T will be nullified, affording cost-cutting customers an extra option.
Sprint is known to be a large carrier in the U.S. for customers who want cheaper rates than the ones offered by Verizon and AT&T. Apart from more affordable calling rates, the company also offers unlimited data plans for its existing smart phone line-up.
To learn more about possible changes to current telecommunications market’s dynamics, Benzinga reached out to Steve Clement of Pacific Crest Securities.
Clement stated that “Sprint will have an advantage compared to current iPhone carriers. It caters to customers looking for better prices. It also offers unlimited data, which is not offered by AT&T and Verizon anymore.”
He also mentioned that “AT&T still has an advantage over CDMA phone carriers like Verizon and Sprint because its data speeds are two to six times faster, based on where you are.
Regardless, all three companies will be affected. Another company that may be affected by the iPhone offering is T-Mobile. Sprint and T-Mobile target similar customers, and significant market share may transfer to Sprint if it releases the iPhone.
Another concern revolved around Sprint being a takeover target. After news was released about AT&T’s acquisition of T-Mobile, speculators wondered if Verizon would buy out Sprint. People even went so far to say that Sprint may merge with other small telecom providers to create a large phone service company. Clement said that an iPhone release would “not change takeover prospects, even if Sprint was or was not considering M&A activity.”
While everything is just speculation right now, the market is starting to price in the possibility of Sprint’s iPhone debut. AT&T and Verizon declined in after-hours trading while Sprint gained a bit. Sprint has a chance to rejuvenate its top-line and to increase its market share, as long as Steve Jobs hands it a lifeline.
— Abe Raymond