Telecom & Wireless

Can Costco's Prestige Really Help Sprint Grow?

Galaxy S4
Source: courtesy of Samsung
Wireless carrier Sprint Corp. (NYSE: S) said on Wednesday that it will add another 100 Costco Wholesale Corp. (NASDAQ: COST) stores to the 106 that already sell Sprint products in kiosks or dedicated retail space in Costco’s stores. Costco owns and operates 451 stores in the U.S. and Puerto Rico.

According to Sprint’s announcement the Costco outlets sell Sprint’s “premium, higher-end handsets,” including 4G LTE phones, from Samsung Electronics, HTC Corp., and the Motorola division of Google Inc. (NASDAQ: GOOG). Sprint does not sell the Apple Inc. (NASDAQ: AAPL) iPhone at its Costco outlets. Neither AT&T Inc. (NYSE: T) nor Verizon Wireless sells iPhones through Costco because the big-box retailer ended its love affair with Apple in 2010-2011 when Apple refused to allow Costco to sell iPods and iTunes cards online. The stores never sold iPhones.

Selling in Costco is better than not selling in Costco, but it’s a bit difficult to see how today’s addition will make a big difference in Sprint’s revenues. The wireless company does not have an exclusive deal with Costco so it is likely that in some stores it will have to compete with AT&T or Verizon Wireless or maybe even both. All three already sell phones through a third party on Costco’s website.

Maybe Sprint can put its kiosks next to the food sample locations. That way at least they’ll get a lot of traffic.

Sprint’s shares are up 0.3% Wednesday afternoon at $6.41 in a 52-week range of $5.61 to $7.26.

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