Sprint CEO Sidesteps iPhone Rumors

Sprint Nextel (NYSE: S) CEO Dan Hesse will neither confirm nor deny the rumored future debut of the Apple Inc. (Nasdaq: AAPL) iPhone on his company's network. But he doesn't refute the iPhone's importance. Hesse spoke at the Goldman Sachs Communacopia Conference in New York City but made it clear that one topic was not up for discussion.

"I'm not going to talk about the iPhone, whether we will or won't have it," he said unequivocally.

Gossip continues regarding the purported release date of the iPhone 5, with some chatter estimating the device will arrive within the next month. Apple is, as usual, mum about the details of the next version of its wonder device. However, Hesse made a telling statement about the role the iPhone plays in the wireless industry.

"The number one source of churn is whether or not a carrier has the iPhone," Hesse said, describing the reasons why customers drop or switch wireless companies. Sprint, the third largest carrier in the country based on number of subscribers, has its share of high-end Android-based phones such as Samsung's Epic 4G and HTC's EVO 4G. Those devices may be competitive alternatives, but the iPhone remains the spiritual, if not technical, leader of the smartphone race.

For now, Sprint is fighting on the undercard to the main event between Verizon (NYSE: VZ) and AT&T (NYSE: T), which both carry the iPhone. Sprint says it has more than 52 million subscribers, compared with Verizon Wireless's 106.3 million and AT&T Mobility's 96 million.

In February, Verizon Wireless made the iPhone available to its customers after Apple's exclusive deal with AT&T expired. If Sprint is looking for a new weapon to bring to the wireless fight, carrying the iPhone would help (unless data usage skyrockets as a result and creates a logjam in the network).

Hesse, however, had other matters on his mind, unrelated to the iPhone. AT&T's proposed acquisition of T-Mobile. T-Mobile, a subsidiary of Deutsche Telekom (NYSE: DT), has some 34 million subscribers. The proposed AT&T/T-Mobile merger drew a legal challenge from the US Department of Justice, which claims the deal violates antitrust law.

If approved, AT&T's absorption of T-Mobile could move the combined company into first place in terms of subscribers. Hesse believes the Department of Justice is not opposed to the acquisition of T-Mobile as much as its affiliation with an already huge player such as AT&T. "You have to show benefits the market will derive from taking T-Mobile out of the market," Hesse said.