Sprint Nextel will start selling the next version of the Apple iPhone in mid-October, according to a report in the Wall Street Journal that cited unnamed sources.
Sprint, the third U.S. operator to become a cellphone distributor for Apple Inc, would be the only iPhone provider offering unlimited use data services for a flat monthly fee if it sticks with its current wireless data offerings.
Verizon Wireless and AT&T will also start selling the device dubbed the iPhone 5 in mid-October, according to the story. Sprint, AT&T and Verizon declined comment and an Apple spokesperson was not immediately available for comment.
A mid-October launch for the next iPhone agrees with Verizon's expectation, announced in July, that it would have a new iPhone in the fall. AT&T Inc and Verizon Wireless already sell the iPhone 4 but these companies have eliminated flat-fee data plans and instead charge more for customers who use more data services.
Sprint shares closed 10.1 percent higher on Tuesday. An iPhone with unlimited data services is expected to help Sprint, which has been losing subscribers to its rivals, to start reporting net customer additions again, one analyst said.
"Combined with the company's marketing focus on its unlimited plan, iPhone would drive a rebound in subscriber growth," said Mizuho analyst Michael Nelson who said it could help Sprint exceed his expectation for fourth-quarter net subscriber additions of about 190,000.
Since Verizon and Sprint use the same network technology, analysts have long speculated that it made sense for
Apple to widen its distribution to Sprint. While Sprint executives have previously said they would like to sell the iPhone, they have never confirmed they were in talks with Apple to do so.
If Sprint gets the iPhone in October, No. 4 U.S. service T-Mobile USA will be the only national U.S. operator without rights to sell the device. But T-Mobile USA, a unit of Deutsche Telekom, is seeking regulatory approval for its
plan to be bought by AT&T for $39 billion.
Asked about iPhone, T-Mobile USA spokesman Tom Harlin said that "ultimately that's Apple's decision." Harlin also said: "We're still focused on Android as our number one priority."
Smartphones based on Google's Android operating system outsold the iPhone in the second quarter of this year.
One problem that money-losing Sprint would face when selling the iPhone is the higher costs associated as operators tend to pay Apple higher subsidies for the device than for other phones.
"If they were to receive the iPhone I would expect their handset subsidies would increase and it would have a near-term negative impact to margins," Nelson said.
This could be a tough sell for some investors, especially those who pushed its shares down 20 percent when it
reported quarterly results on July 28 as many were skeptical it could meet its profit target for the year.
"Some investors would welcome subscriber growth and others would worry about the increased cost," said Nelson. "The bulls would argue it's well worth the cost because it would be accretive to long term margins."
Verizon Wireless a venture of Verizon Communications and Vodafone Group Plc started selling iPhones in February, ending AT&T's three years of exclusive U.S. rights for the the device.
Sprint shares closed up 33 cents at $3.59 on the New York Stock Exchange.
(Reporting by Sinead Carew in New York and Poornima Gupta in San Francisco; Editing by Tim Dobbyn, Phil Berlowitz)