Sprint CEO dances around iPhone rumors

This time, Sprint CEO Dan Hesse says that if the company gets the iPhone, it would have to change its guidance.

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Roger Cheng (he/him/his) was the executive editor in charge of CNET News, managing everything from daily breaking news to in-depth investigative packages. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade and got his start writing and laying out pages at a local paper in Southern California. He's a devoted Trojan alum and thinks sleep is the perfect -- if unattainable -- hobby for a parent.
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Roger Cheng
3 min read

NEW YORK--Another day, another near-confirmation that Sprint Nextel would get the iPhone.

Dan Hesse at Sprint headquarters today
Dan Hesse at Sprint headquarters in July Kent German/CNET

This time, Sprint Chief Executive Dan Hesse noted that the company's financial expectations for the year don't factor in the "rumored device," and hinted at a possible change.

"If we get it--if--we may have to adjust our guidance for that," Hesse said today during an investor conference sponsored by Goldman Sachs.

Hesse otherwise tiptoed around the iPhone rumors, and noted at the beginning of the presentation that he would not be talking about whether Sprint would carry Apple's iconic device. But his comments follow a drumbeat of rumors that point to the carrier getting the iPhone, which would put it on par with AT&T and Verizon.

Earlier today, Verizon Chief Executive Lowell McAdam addressed the rumor at the Goldman conference, noting he isn't concerned.

"I will tell you that about two years before we got the iPhone, we were rumored to be getting it," McAdam said. "So we'll have to see what happens with Sprint. But if it does happen, I am not worried."

Last week, Sprint Chief Financial Officer Joe Euteneuer said that Sprint's network would be ready to handle the increase in traffic that the iPhone brings, even if he didn't confirm actually getting the iPhone.

Today, Hesse acknowledged that the biggest reason Sprint customers leave is because they want to switch to the iPhone.

There's concern that once Sprint gets the iPhone, it will eventually shutter its unlimited data plan, currently the only one in the market. Hesse said the company is doing everything it can to keep the plan, even holding regular meetings under the theme, "Thinking Unlimited."

"We watch it very closely, and we believe it's profitable," Hesse said. "If it becomes unprofitable, we won't offer it anymore."

The unlimited plan has helped Sprint compete against AT&T and Verizon Wireless, the two largest wireless carriers that Hesse said would further consolidate their power if AT&T were to scoop up T-Mobile USA.

Hesse disagreed with the notion that the U.S. Justice Department's attempt to block the merger would bode poorly for Sprint's own attempt to buy T-Mobile if the AT&T deal were to fall through. Without saying Sprint would want to buy T-Mobile, Hesse said the combination of two value players would make for more competition in the industry than AT&T swallowing up T-Mobile.

Hesse said that the regulators want AT&T to make its case for the benefits of taking away a major competitor, which AT&T hasn't done because it doesn't acknowledge T-Mobile as a competitive threat.

AT&T has said the deal would allow it offer 4G service to more people in the country and improve service through an increase in wireless spectrum. The company has also promised to bring back jobs it outsourced overseas.

Hesse joked that even his son could figure out that a deal with $40 billion in merger cost reductions would lead to job losses.

Financially, Hesse said he expects average revenue per user to pick up as more contract customers upgrade their phones and get charged the extra $10 data fee. On the prepaid market, Hesse said he believes pricing is beginning to stabilize. But he warned that average revenue per user would continue to fluctuate as it increases its shift in lower-priced--but still profitable--services.

"Prepaid has become an important part of the industry," he said.

Hesse didn't answer many questions about the company's 4G plans, instead pointing to the company's October 7 meeting in New York. The company will use the event to lay out its plans for its future network.