Investors turned hostile on Sprint late Friday amid reports that the US operator was not upfront about costs relating to its LTE and iPhone rollouts. According to Reuters, Sprint shares closed down 20 percent on Friday following the firm’s investor day in New York where it unveiled plans to speed up migration to LTE.

Investors appear worried that this aggressive strategy could see the firm burn through cash over the next few years, a situation that may be exacerbated by the operator’s decision to begin offering the iPhone, which will see it pay considerable subsidies to Apple.
 
"They're going to be spending more money than they're bringing in for the next couple of years.. even before iPhone costs," Hudson Square analyst Todd Rethemeier told Reuters.

According to reports last week, Sprint will need to pay US$500 to subsidise each iPhone it sells, leading it to lose money on the device until 2014. CEO Dan Hesse (pictured) noted during the Investor Day only that the device would be “accretive to our cash flow and profitability over time.”

Sprint said on Friday that its LTE rollout will be complete by the end of 2013, some two years earlier than previously indicated, an upgrade expected to cost at least US$5 billion.

While Sprint talked up the future financial benefits of the upgrade, it appeared cagey on the short-term impact. One revealing slide hinted that liquidity would be significantly reduced over the next two years before improving after 2013 – even excluding the impact of the iPhone costs.

The issue sparked some heated exchanges between senior management and investors during the Q&A.

“After a slate of presentations that were far short on details, the Q&A session got ugly as the management team continued to avoid providing any detailed answers and in many cases offered responses so short and void of details that the CFO was actually laughed at,” said Walter Piecyck with BTIG Research in a research note.

He continued: “We believe Sprint is uninvestable until they can provide better clarity on Ebitda, their 4G strategy and their capital structure.”