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Sprint CEO Marcelo Claure Touts Lease Plans, Network Improvements on Eve of iPhone 6s Launch

Claure says that even with its $1 lease offer, Sprint expects enough iPhone 6s supply to meet demand.

Asa Mathat for Re/code

Not only is Sprint offering to lease Apple’s new iPhone for as low as $1 per month, the company says it actually expects to get its hands on enough iPhones to avoid the long wait times typical for new Apple products.

“We feel we have adequate supply to fulfill the demands of our customers,” Claure told Re/code in a telephone interview on Thursday. Claure said that Sprint is getting better response from device makers now that it is once again gaining customers.

“No one wanted to partner when Sprint was losing 700,000 customers a quarter,” Claure said.

As for the cost to Sprint of the aggressive leasing plans, Claure insists that analysts are overestimating the cash impact, noting that Sprint gets $400 in value for each iPhone 6 it gets in trade-in, making the economics better than the old days of subsidized $199 iPhones. The demand for used iPhones is strong, Claure said, noting the relationship Sprint has with Brightstar, the cellphone logistics company Claure ran before taking the helm at Sprint a year ago.

“The analysts have to do their homework a little better,” Claure said. The biggest cash impact is by moving to leasing at all, he said, adding that the company will minimize that by setting up a new SoftBank-backed entity that will buy the phones from Apple and lease them to Sprint, which will then lease them to customers.

“We think it is a very important way for us to stop burning cash,” Claure said.

Sprint has been working to both stem losses and add customers at a time when T-Mobile has been gaining the bulk of customers, recently passing Sprint to become the No. 3 U.S. carrier. At the same time, Sprint has been trying to improve its network, which has been the worst performing of the major carriers.

Claure touted the improvements that Sprint has been making, saying the results are already showing in a few cities.

He reiterated the goal he set at Code Conference earlier this year, stating that Sprint will have the No. 1 or No. 2 network by 2017, adding that his goal is for that to be the case in 80 percent of cities at that point.

As for his love-hate relationship with John Legere, CEO of rival T-Mobile, Claure said, “It’s a relationship of mutual respect between two very passionate CEOs who are living their business every day.”

“You know, we’re just fighting hard,” Claure said. “I love what they’re doing, how they’re disrupting the market. I think competition is good. It’s healthy. It keeps everyone working very efficiently.”

That said, he couldn’t resist getting a dig in on how Sprint pioneered leasing a year ago and T-Mobile is now offering lease plans.

“It wasn’t that long ago when John Legere was calling it a scam,” Claure said. “A year later, he replicated not only our lease, but everything we do.”

Claure said he expects AT&T and Verizon to also get in on the leasing game, especially now that Apple is offering its own lease options. He said he likes the Apple store plan, noting that when customers lease through Apple and choose Sprint’s network it is one of the most profitable types of sales.

“It achieves a lot of positive things for us,” he said. “They’re investing the money for people to come into our network.”

T-Mobile says it too expects enough supply of the latest iPhone. “Supply outlook on most models is really good,” T-Mobile operating chief Mike Sievert told Re/code. “I believe from multiple sources that we are getting much better supply than Sprint, based on our superior sales. If Sprint says they have enough supply to meet demand, that probably says a lot about their demand.”

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