Sprint’s woes continue

13 May 2008

The third largest US cellular operator, Sprint Nextel, has had another poor quarter, with net losses more than doubling and subscriber numbers declining by almost 1.1 million. The firm has been struggling over recent quarters as users defect to rival networks; 1.07 million of Sprint’s most lucrative customers – those on post-paid contracts – migrated to other carriers in the first three months of this year, while 200,000 pre-paid users also shifted providers. There were minor subscriber gains via the cellco’s wholesale and affiliate operations, but the net result was a loss of 1.087 million customers over a three-month period, taking the total customer base down to 52.8 million. This was reflected in Sprint’s financial performance, with net losses growing from USD211 million in Q1 2007 to USD505 million in the most recent period, though there was a one-off pre-tax charge of USD317 million due to merger and integration costs. Revenues dropped 8% to USD9.33 billion.

CEO Dan Hesse says the company is expecting only a slight recovery in the second quarter performance: ‘Improving the customer experience and being more selective about the customers we acquire should improve churn, but we expect that post-paid subscriber losses will improve only marginally from first-quarter levels.’

United States, Sprint Corporation (now part of T-Mobile US)