Sprint's fortunes could scarcely have been worse over the past three years, but it's starting to look like the company is at least getting worse more slowly.
Over the past quarter, Sprint lost a mere 75,000 wireless subscribers, representing the company's best news on wireless customer numbers since it lost 60,000 wireless subscribers in the third quarter of 2007. The company hasn't had a net positive wireless subscriber addition since the second quarter of 2007, when it added 373,000 wireless subscribers.
The fact that Sprint came close to breaking even in wireless subscriptions for the first time in three years comes as a relief to a company that has lost more than 5 million wireless subscribers over the past three years. At its lowest point in the third quarter of 2008, Sprint lost a whopping 1.3 million wireless subscribers, and for all of 2008 Sprint lost more than 4 million wireless subscribers.
But despite the relatively good recent news, there are still some signs that Sprint might not be out of the woods just yet. Sprint is still hemorrhaging postpaid subscribers, who over the past quarter generated more than twice the average revenue per user (ARPU) for Sprint than its prepaid subscribers. For the quarter, Sprint lost 578,000 postpaid wireless subscribers and the carrier has lost 9.4 million postpaid subscribers over the past three years.
So while Sprint's losses in the postpaid market this past quarter were nearly offset by its gains in the prepaid market (348,000 new subscribers) and the wholesale market (155,000 new subscribers), it will have to start posting gains in postpaid users in the near future to have sustainable revenue growth. Gartner analyst Alex Winogradoff says many of the losses have come from customers fleeing the slower iDEN network that the carrier inherited when it merged with Nextel in 2005. With the company moving more to WiMAX for wireless data over the next year, Winogradoff says he expects to see significant improvements in Sprint's postpaid subscriber numbers.
"Many of the customers lost by Sprint had to do with weeding out the costly customers as well as the loss due to the economic downturn and not having a strongly-differentiated handset offering," he says. "As WiMAX ramps up and the business market returns they will be adding more post-paid customers."
Sprint currently buys access to WiMAX services through a wholesale agreement with ISP Clearwire, whose commercial WiMAX services are currently available in more than 27 U.S. markets covering more than 34 million points of presence (POP). By year-end, Clearwire aims to have built out a WiMAX network that spans all major U.S. markets and that covers 120 million POPs. Other big-name companies with wholesale agreements with Clearwire include Comcast and Time-Warner Cable.
In terms of new handsets, Sprint has yet to get a phone with the big brand-name recognition that AT&T has with the iPhone and that Verizon has with the Motorola Droid. Sprint still has an impressive line of BlackBerry devices on its network, however, including the new Bold 9650, the Curve 8530 and the Tour. Additionally, Sprint is due to release the HTC EVO 4G later this year, which will be the first phone in the U.S. to run on Sprint's WiMAX network and which will have a 1GHz Qualcomm Snapdragon processor that will match the processing speed of Google's Nexus One smartphone.
Winogradoff says that pushing next-generation data devices and services will be key if Sprint is to have a revitalization.
"It is really more about retaining quality subscribers and adding in customers interested in next-generation data services," he says. "As these [WiMAX devices] ramp up in line with an improving economy
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This story, "Can Sprint Bounce Back?" was originally published by Network World.