CTIA: Sprint sees phone subsidies rising for carriers

Reuters News
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Posted: Mar 22, 2011 1:33 PM
CTIA: Sprint sees phone subsidies rising for carriers

ORLANDO, Florida (Reuters) - U.S. wireless operators will have to pay higher subsidies for cellphones as they come with more features, according to Dan Hesse Chief Executive of Sprint Nextel.

"Subsidies are going to increase as devices get more powerful," Hesse said during a chief executive panel at the CTIA wireless industry conference. He promised to introduce a new high-speed phone at the show.

As device makers add features, such as higher-speed Web links and more powerful cameras, Hesse said, "there's going to be more cost to us."

Hesse declined to comment on whether subsidies required for the Apple Inc iPhone would be too high for Sprint to offer the popular device.

The annual wireless show started just two days after AT&T Inc said it would pay $39 billion for No. 4 U.S. mobile service T-Mobile USA, a unit of Deutsche Telekom.

The deal would leave Sprint as a much smaller No. 3 player in the U.S. wireless service market. Sprint has stopped short of saying that it would formally oppose the deal in a review by U.S. regulators, but Hesse said it stifles competition in response to a question from the panel moderator.

"I am concerned about it," he said.

Verizon Wireless, who will be overtaken as market leader by a combined AT&T and T-Mobile USA, said it was not concerned about the deal and would not oppose it.

Verizon Wireless is a venture of Verizon Communications and Vodafone Group Plc.

(Reporting by Sinead Carew and Barbara Liston; Editing by Derek Caney)