Sprint added 1.1 million subscribers in the last quarter of 2010, including 58,000 lucrative postpaid customers, its best effort since early 2006. The growth in contract customers was helped by a record low churn in postpaids: Sprint (s s) recorded a 1.95 percent churn rate for the year, ending 2010 with 49.9 million total customers, which includes 12.3 million prepaid accounts. What’s helping to add Sprint customers? Hot Android devices with fast mobile broadband radios!
Google’s Android (s goog) platform and its “available to all” approach certainly has its critics. But if you’re Sprint — or Motorola, for that matter (s mmi) — you’d be hard pressed to be too critical. Without an iPhone (s aapl), Sprint married Android handsets to its WiMAX and EVDO networks in order to attract customers. The HTC Evo 4G is long in the tooth as smartphones go, but still attracts attention and is holding its $199 price point after nearly a year. And the popular device just gained a refresh in the HTC Evo Shift 4G, which adds a sliding hardware keyboard.
Android is also poised to help with Sprint’s prepaid area, which has blossomed over the past few years while the carrier was losing postpaid consumers. Sprint’s Virgin Mobile brand now offers the LG Optimus V at $149, for example, with limited voice plans paired with unlimited 3G data for $25 per month. As prepaid consumers decide to step up from feature phones, Sprint would be wise to expand its stable of low-cost Android smartphones.
But there’s a downside to that strategy as well: Sprint’s press release today notes that prepaid ARPU (average revenue per user) declined to $28 from $31 in 2010 as customers of its Assurance Wireless and Virgin Mobile brands are lower-value than its Boost Mobile customers. The Virgin Mobile plans increase in price with more voice minutes and we know that voice is now becoming worthless, so perhaps a modification to the unlimited data aspect would boost prepaid ARPU. Even prepaid consumers want their Android phones with Facebook — will Sprint make them pay for it?
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