Sprint Retreats From Android Leasing as Used Market Dipsby
Phones returned after lease period not holding value, CFO says
Carrier took a $111 million charge to cover unreturned phones
Sprint Corp., the fourth-largest U.S. wireless carrier, stopped leasing certain Android phones to customers after finding that the devices weren’t holding their value on the used market.
Android devices including the Samsung Galaxy, along with models from HTC and LG, were withdrawn from Sprint’s leasing program in September, Chief Financial Officer Tarek Robbiati said at an investor conference Wednesday.
The retreat follows Sprint’s decision to take a $111 million charge in the third quarter to cover losses on unreturned phones. Though the carrier still offers $27.09-a-month leases on Apple iPhones for no money down, the percentage of their customers who rent phones dropped to 39 percent in the most recent quarter from 51 percent a year earlier.
Shares of Sprint fell 2 percent to $7.84 at the close Wednesday in New York.
“If the leasing programs were going well they probably wouldn’t be pulling back on them,” said Walt Piecyk, an analyst at BTIG LLC.
In a battle to lure customers wanting the iPhone, Sprint offered $1 leasing last year, beating rival T-Mobile US Inc. on price. Verizon Communications Inc. and AT&T Inc., the No. 1 and No. 2 carriers in the U.S., don’t offer leasing options.