Sprint Targets Burgeoning Teen Market with Parents Playing Big Brother

by Tim Brugger
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Market
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The teen market, consisting of those in the 12 to 17 year age group, is plugged into cellular devices and plans to a much greater extent than you might imagine. According to a Pew Internet Research study, more than 75% of this group owns a wireless phone. This isn’t news to Sprint Nextel (NYSE: S) or mobile phone competitors such as Nokia (NYSE:NOK), AT&T (NYSE:T) and Verizon (NYSE:VZ).

Of course, Sprint has made great inroads into the Mobile Internet market, a Trefis division that makes up 47% of the stock price. But Mobile Plans and Phones division should not be overlooked. At 33% of the Trefis value, this is a market that both generates significant revenue for S and has tremendous upside.

The Partnership with Safely

Sprint issued a press release [1] recently announcing a partnership with Safely. In essence, the partnership will give parents the opportunity to remotely monitor and control their child’s cellular phone usage with a solution Sprint calls Mobile Controls. With many parents hesitant to purchase a cell phone for their kids because of all the trouble they can cause (inappropriate texts, downloads, etc.), this could be a real boost for Sprint in a growing market.

The partnership is also an indication of Sprint management’s growth initiatives. For an undervalued stock like S, these types of efforts should not go unrecognized. And with an upside of over 60% according to Trefis estimates, there are significant gains to be had. The recent agreement to sell the outstandingly popular iPhone won’t hurt revenue objectives either.

It’s a Crowded Market

Part of what is so appealing about Sprint’s recent initiatives is the aggressive manner in which management is addressing the stock’s current status, particularly in light of such a competitive market. Sitting idly by is not an option for mobile phone companies, as S is well aware of.

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Notes:
  1. Sprint and Safely Help Families Manage Wireless Phone Usage with Innovative Mobile Controls, Sprint []
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