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Sprint Makes Another Bold Move

It's a story we've seen on television for years. The little guy in school gets picked on by the stronger, more popular bullies. Nothing is really going his way -- his shoes are last season's, he's not too athletic, and he certainly isn't making any inroads with the ladies. That's essentially where Sprint Nextel stands in the U.S. wireless market. The company is only a fraction of the size of its rivals AT&T and Verizon, gets little respect, and always seems to be playing catch-up. However, this year the company is taking a few steps to try to close the gap. It recently lowered the price on the introductory iPhone 4S to 25% below that of its competitors, and it has plans to leverage Alcatel-Lucent's lightRadio Metro Cells to execute a high-paced 4G LTE network rollout.

Sprint's bold move on the iPhone pricing front may pay off in the short term, but the real key for the company lies in its ability to compete for buyers of the next-generation model released later this year. Given how important it is for Sprint shareholders, keeping tabs on Apple is a great idea. If you're looking for a recommendation on how to play Apple along with continuing updates and guidance on the company whenever news breaks, we’ve created a brand-new report that details when to buy and sell Apple. To get started, just click here now.

Brenton Flynn owns shares of AT&T. The Motley Fool owns shares of Apple. Motley Fool newsletter services recommend Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (13)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 11, 2012, at 3:03 PM, plange01 wrote:

    how many consecutive losses can sprint last before it finally goes bankrupt! this is the olympic champion of failure!

  • Report this Comment On August 11, 2012, at 6:01 PM, LowellUkulele wrote:

    Consumers are finally noticing that AT&T and Verizon = The Most Expensive Wireless Plans in America. For the post-paid customer, the fact remains that Sprint is the only U.S. carrier to offer them the iPhone experience with unlimited data plans starting at $79.99 per month. Plus, Verizon now charges its customers $30 to upgrade to a new phone when they renew. AT&T charges $36. But Sprint only charges $18. An investment writer recently summed it up best: “Sprint offers the best value proposition for a new smartphone user. I got my first smartphone on Sprint because a new AT&T or Verizon data plan is outrageous. My Sprint plan includes 450 afternoon mobile-to-landline minutes, unlimited other minutes, and unlimited texting and data for $79.99. Unlimited AT&T or Verizon plans would approach $150, and to get a comparably-priced package, I'd have to settle on limited data or texting plans, which I'd have to constantly try to not blow through. Why get a smartphone if you can't have fun using it?” Sprint also placed first in the industry in customer satisfaction, according to results from the 2011 and 2012 American Customer Satisfaction Index. They also just received the J.D. Power award being top-ranked in the consumer wireless purchasing experience.

  • Report this Comment On August 11, 2012, at 11:21 PM, Aryabod wrote:

    The first thing you learn in business is the art and magic of accounting. Once you have been able to discern the difference between real losses and GAAP losses then you will, no doubt, be a much better investor. Of the $36 billion Sprint paid for Nextel in 2005 they have written off $30 billion giving them plenty of lattitude to write down their profits.

    It is also my understanding, if I am not mistaken, that a company's assets have to be adjusted to 'mark to market.' This means as Clearwire loses market capitalization so do Sprint's assets.

    In summary, once we understand this 'magic' of accounting we can start looking at a company's financials from a different frame of reference, such as Free Cash Flow...

    In conclusion Sprint has never been close to Bankruptcy, however using the criteria of many analysts that are Short on Sprint such as CRAIG MOFFET and WALTER PIECYK 80% of the S&P 500 could go bankrupt.

    Nonetheless, once Sprint completely puts the final nail in Nextel's coffin and repurposes its very valuable assets the company will either trade north of $12 or be taken over, unless TMobile and Sprint do a M&A with one another.

    Remember you heard this from ARYABOD.

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