Sprint still losing customers but at a slower rate

7 Aug 2008

Sprint Nextel has continued to lose customers in the second quarter of this year. 901,000 customers abandoned the wireless operator in the three months to 30 June, leaving it with a total of 51.9 million customers, compared with 54 million the end of the same quarter last year. The decline in customers was split 776,000 post-paid and 250,000 pre-paid, equating to post-paid churn of 2%. That was an improvement from Q1 2008, when the company lost over one million subscribers and had a post-paid churn of 2.45%. The subscriber losses were partially offset by increased customers for its wholesale business and112,000 new Boost Unlimited customers. Sprint’s CEO Dan Hesse said the new ‘Simply Everything’ unlimited voice and data plan is encouraging stabilisation among its customer base and has performed better than expected, although he said he expects subscriber losses to continue in the third quarter. At the end of June 2008 Sprint claimed 38.9 million post-paid subscribers, 4.2 million pre-paid subscribers and 8.7 million wholesale and affiliate customers. Post-paid monthly ARPU in the second quarter of this year was USD56 per month while data monthly ARPU was USD12.

Total revenue was USD9.06 billion, down 11% year-on-year. Wireless revenue was USD7 billion, also down 11%. Sprint’s wireline business, mainly used for high speed internet customers, reported a 27% increase in operating income to USD160 million while quarterly revenues fell 2% to USD1.6 billion. The company reported a second-quarter net loss of USD344 million, compared to a profit of USD19 million for the same period twelve months previously.

Sprint is working to reduce its debt burden and in July revealed plans to sell almost all of its towers to private tower company TowerCo in a cash deal worth about USD670 million. The company said yesterday it also plans to sell up to three million shares of preferred stock to raise a further USD3 billion.

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