Sprint Revenue, Loss, User Base Shrank in Q4
Sprint Nextel narrowed its losses and slowed, but didn't stop, the decline in its subscriber ranks in the fourth quarter of last year, the company reported Wednesday.
The company lost US$980 million, or $0.34 per share, an improvement over a loss of more than $1.6 billion in 2008's fourth quarter. That was despite its revenue declining to $7.8 billion from $8.4 billion a year earlier. Revenue was also down for the full year 2009, as Sprint posted an annual loss of $2.4 billion, or $0.84 per share.
The third-largest U.S. mobile operator has been fighting an uphill battle for years against the larger AT&T and Verizon Wireless, losing subscribers and working to reverse a poor reputation for customer service. Sprint said it gained on both measures in the fourth quarter, though its customer base continued to shrink.
Sprint's CDMA (Code Division Multiple Access) network gained more than 3,000 post-paid subscribers in the quarter, its first net gain in six quarters, the company said. That was partly a result of about 93,000 subscribers moving to CDMA from Sprint's Nextel brand service, which runs on the iDEN network. Sprint also brought about 4.5 million prepaid users on to its own services by acquiring Virgin Mobile, which had been a wholesale customer that resold Sprint network capacity. Sprint company also bought iPCS, a former affiliate.
Churn, or the rate of turnover among subscribers, slowed during the quarter to 2.11 percent from 2.16 percent a year earlier among post-paid subscribers. Sprint attributed that to better credit ratings among those customers. Pre-paid churn also slowed to 5.56 percent from 8.30 percent at the end of 2008.
But across all its brands and networks, Sprint's customer base still shrank from 48.3 million to 48.1 million during the quarter.
However, Sprint said its customer service, and its success rate for solving problems on the first call, improved for the eighth consecutive quarter. And the company forecast that its overall subscriber losses will improve in 2010 from last year.
The company made $427 million in wireless capital expenditures in the quarter, up from $304 million a year earlier. It expects to post full-year capital expenses of $2 billion in 2010.
Despite the lackluster response so far to the Palm Pre and Pixi phones Sprint introduced in 2009, wireless data is still going strong for the carrier. Data services generated more than 35 percent of the average revenue per user on Sprint's CDMA network in the quarter, the company said. Sprint brought in $19.50 per month from an average user for data services.