Sprint to Offer Low-Priced LTE Phone

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Increased competition from other carriers has induced Sprint Nextel Corp. (S) – the third-largest wireless carrier in the U.S. – to launch a low cost ZTE Vital smartphone. The new Android handset will be based on Google Inc.’s (GOOG) user-friendly Android 4.1 Jelly Bean platform.

The newly-launched 4GLTE-based ZTE Vital features a 13 MP front-end camera and 1 MP rear-facing camera supporting a resolution of 1280 x 720 pixels. It is provided with 8 GB in-built memory which can be expanded up to 64 GB. Moreover, the device is powered with industry leading Qualcomm Inc.’s (QCOM) 1.5 GHz Snapdragon S4 dual-core processor, for enhanced network speed.

The new handset has been priced at $100 (inclusive of a $50 mail-in rebate) with a two-year service contract from Sprint. The handset will hit the Sprint stores on Jun 14.

Sprint plans to deploy its 4GLTE by the end of 2013, encompassing more than 250 million customers with 22,000 cell sites. So, in order to support its future 4GLTE rollout plan, the company is continuously launching 4GLTE handsets across its entire footprint.

In the recently concluded first quarter, Sprint lost approximately 415,000 subscribers, representing a net loss of 191,000 in retail subscribers and 224,000 in wholesale and affiliate subscribers. Sprint witnessed subscriber churn of 1.84% as compared to Verizon Wireless and AT&T, Inc. (T) whose subscriber churn for the first quarter was 1.30% and 1.38%, respectively.

Hence, we believe that the successful deployment of 4GLTE services across its footprint coupled with a huge 4GLTE-based smartphone portfolio will not only reduce subscriber churn but will also boost data revenue growth for the company, going forward.

Currently, Sprint has a Zacks Rank #3 (Hold).

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