Sprint CEO Says iPhone to Be One of Most Profitable Devices

Sprint Nextel Corp. Chief Executive Officer Dan Hesse said the iPhone will be one of the third-largest U.S. wireless carrier’s most profitable devices.

Sprint shares rose as much as 12 percent after Hesse told investors at a meeting in New York the Apple Inc. device will be “accretive.” Sprint this week became the third U.S. operator offering the iPhone, the new version of which is available for pre-order online this morning.

Hesse is banking on the iPhone to jump start sales growth and lure customers from larger rivals AT&T Inc. and Verizon Wireless, which also offer the iPhone. In July, Sprint posted its 15th consecutive quarterly loss and reported it lost more contract customers than some analysts had estimated.

Sprint, based in Overland Park, Kansas, rose 32 cents, or 11 percent, to $3.33 at 10:22 a.m. in New York Stock Exchange trading, and earlier climbed as high as $3.36. The stock had lost 29 percent this year before today.

Hesse also said the company will begin operating its long- term evolution network in mid-2012. Sprint has pledged $5 billion to upgrade its network and add LTE, a standard used by AT&T and Verizon. Sprint’s investment will ensure that the company is able to support devices’ increasing data demands and run them on what will be a more common network technology.

The upgrade is Sprint’s biggest investment in three years, according to Jennifer Fritzsche, a Wells Fargo & Co. analyst.