Sprint Nextel Reports Wider Loss of Retail Subscribers

On the heels of announcing it will buy its wireless affiliate iPCS, Sprint (News - Alert) Nextel today reported third quarter financial results that included consolidated net operating revenues of $8 billion, a net loss of $478 million and a diluted loss per share of 17 cents.

 

According to Sprint officials, the Overland Park, Kan.-based company generated free cash flow of $664 million in the quarter and $2.1 billion year-to-date in 2009. As of Sept. 30, 2009, the company had $5.9 billion in cash, cash equivalents and short-term investments and $1.6 billion in borrowing capacity available under its revolving bank credit facility, for total liquidity of $7.5 billion.

 

Sprint reported it lost a total of 135,000 net retail subscribers in the third quarter, however achieved its best net retail subscriber results in more than two years, driven by sequential improvement in both post-paid and prepaid gross subscriber additions, company officials said. In a recent interview with Dan Dooley, the company’s president of wholesale solutions, he said that “perception has not caught up with reality,” and the company is also focusing on growing its wholesale side and bundling services.

 

After Dan Hesse took over as CEO of the company in late 2007, one of his first priorities was to stabilize its churn numbers – specifically, in which customer satisfaction numbers were too low and customer turnover figures were too high. Its wireless customers were not very happy with customer service, fault repair, inconclusive discussions with representatives, retail related marketing queries, lack of consistent online solutions, and poor interactive voice response systems, TMCnet reported.

 

The company’s year-over-year post-paid gross addition improvement was the best in Sprint Nextel (News - Alert) history, company officials said, and the sequential improvement was the best in more than five years. Net post-paid subscriber losses have improved by approximately 20 percent in each of the second and third quarters of 2009.

 

“Sprint is beginning to attract more customers with the industry’s best device line-up and the clarity and simplicity of our offers, seven sequential quarters of improvement in customer care satisfaction, a network declared to be most reliable by PC World magazine, and recognition from Newsweek magazine which ranked Sprint fifteenth out of 500 companies on its 2009 Green Ratings list – the only telecom company in the Top 100,” Hesse said in a statement.

 

In 2009, Sprint launched or announced 16 new touch, QWERTY and smart devices with a selection of operating systems. They include Palm Pre and PalmPixi, Blackberry Tour; HTC Hero and Samsung Moment, which are both based on Google’s (News - Alert) Androidplatform; HTC Touch Pro 2, Samsung Instinct HD, and Samsung Intrepid, which offers the new Windows Mobile6.5 Professional operating system. In addition, Sprint launched the nation’s first full-featured, eco-friendly phone, Samsung Reclaim which earlier this month was given the “Hottest in Show” award at the CTIA (News - Alert) Convention in San Diego.

 

Calling the developer community the cornerstone of mobile innovation, Steve Elfman, president, network operations and wholesale, outlined Sprint’s “open” approach this week at an industry conference and encouraged developers to create applications that work not only on Sprint’s most dependable 3G network, but across the industry.

 

Sprint 4G is now available in 17 markets, including Philadelphia, which launched earlier this week. Sprint 4G coverage should serve a population of more than 30 million people by the end of 2009, and cover a population of up to 120 million people in about 80 markets by the end of 2010, company officials said. Sprint 4G service is planned for deployment in these additional markets in 2009: Austin, Texas; Charlotte, N.C.; Chicago; Dallas/Ft. Worth; Greensboro, N.C.; Honolulu; Maui; Raleigh, N.C.; San Antonio, Texas; and Seattle.