YOU ARE AT:WirelessSprint Nextel posts improved Q3 losses

Sprint Nextel posts improved Q3 losses

When is a loss a win? When you are Sprint Nextel Corp. of course.

Spinning like a champion, Sprint Nextel used a variety of percentages and claims of “best” performance in company history to describe a convoluted customer picture.
Try to follow this: Sprint Nextel said it lost 801,000 postpaid customers during the quarter, comprised of 271,000 CDMA customers and 530,000 iDEN customers. But, it gained 801,000 prepaid customers on its iDEN-based Boost Mobile operations, which was tempered by the loss of 135,000 prepaid customers using its CDMA network, so net-net a gain of 666,000 prepaid customers. This resulted in the total loss of 135,000 direct retail customers during the quarter. In addition, Sprint Nextel said it lost another 410,000 wholesale and affiliate customers during the quarter, meaning it ended Q3 with 545,000 fewer customers on its network than it started, or 48.3 million total customers. Make sense?
Taking a step back, Sprint Nextel lost 321,000 fewer direct postpaid customers, gained 995,000 more prepaid customers and lost 540,000 more wholesale and affiliate subscribers year-over-year. Net result: The carrier lost 776,000 fewer customers during the third quarter of 2009 than in 2008. Glass half full or half empty? You decide.
And where did those customers go? Well, Sprint Nextel’s larger rivals, Verizon Wireless and AT&T Mobility, reported net customer additions of 1.2 million and 2 million respectively for the third quarter, so that might be a place to start. Yet to report of the big 4 is T-Mobile USA Inc., which recently revamped its price plans to favor customers looking to avoid a contract.
Despite the continued struggles with retaining customers, Sprint Nextel reported that postpaid customer churn inched up slightly year-over-year from 2.15% to 2.17%, while prepaid churn dropped dramatically from 8.16% during the third quarter of 2008 to 6.65% this year. These results, along with the improvement in customer losses, bolstered management claims that the carrier is stemming the outflow of customers.
Sprint Nextel also showed improvements in average revenue per user; postpaid results remained steady at $56, while prepaid ARPU increased from $31 to $35 year-over-year. The carrier attributed the prepaid growth to its $50 per month, unlimited Boost offering. Data revenues contributed $16.25 to the carrier’s postpaid results, with CDMA data ARPU ringing in at more than $19 during the quarter, or 34% of total postpaid CDMA ARPU.
The continued loss of customers as well as the cost of keeping users who have stayed and attracting new customers took a bite out of Sprint Nextel’s financial results. The carrier reported that wireless service revenues slid 8% year-over-year to $6.3 billion during the third quarter. Wireless operating expenses also crept up slightly from $7.3 billion in 2008 to $7.4 billion this year. This resulted in an increase in net losses from $220 million in 2008 to $448 million this year. Sprint Nextel also reported that it increased capital expenditures from $227 million during the third quarter of 2008 to $310 million this year.


Editorial Reports

White Papers


Featured Content