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Sprint loses $1.62B and 1.3M subs in Q4
The nightmare continues for Sprint Nextel, which reported a fourth-quarter net loss of $1.62 billion compared with a year-earlier net loss of $29.45 billion--another 1.3 million subscribers left the operator, reducing its overall subscriber count to 49.3 million. Sprint has now lost more than 5 million postpaid customers over the past five quarters; by contrast, AT&T signed on 2.1 million new subscribers in Q4, while Verizon Wireless added 1.2 million. Sprint reported a wireless churn rate of 2.16 percent, up slightly over a third quarter rate of 2.15 percent but an improvement over the 2.29 percent posted in the year-ago period. The carrier also said almost 10 percent of post-paid customers upgraded their handsets during the Q4 holiday season, resulting in increased contract renewals and, one can assume, improved data revenues as subscribers upgrade to smartphones.
Speaking of which, Sprint's wireless service revenues declined 13 percent year-over-year to $6.6 billion--wireless post-paid ARPU in the quarter remained stable sequentially at $56, with data growth helping offset voice declines. Data revenues contributed more than $14.50 to overall post-paid ARPU in Q4, galvanized by growth in CDMA data ARPU, which increased about 9 percent quarter-over-quarter to more than $17.75. According to Sprint, data now represents almost 31 percent of total CDMA ARPU, buoyed by strong take rates on bundled data services and continued growth in data cards.
Late last month, Sprint announced it will eliminate about 8,000 jobs in an effort to reduce labor costs by approximately $1.2 billion. The cuts are expected to be completed by March 31 and will impact all levels within the organization, although the impact will vary among geographic locations. Sprint adds it has seen a recent reduction in customer care calls per subscriber and an overall increase in consumer satisfaction resulting from customer service improvements, and accordingly the majority of the headcount reductions will focus on non-customer facing divisions. Sprint noted that job reduction total includes roughly 850 positions expected to be cut under a voluntary separation plan initiated late last year.
For more on Sprint's Q4 results:
- read this release
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Comments
Posted by James Fisher | February 19, 2009 - 12:47pm
James Fisher from Sprint here. "The nightmare continues?" Yes, we are not performing as well as well as we want to, and in terms of subscriber adds, not as well as some large competitors. There's no denying that. But to suggest our performance in the 4th quarter was a "nightmare," is way off the mark, I think. Here are the facts: In a terrible economic environment, our 4th quarter churn (customers leaving) was stable, reflecting a trend that was the best in the industry for the quarter. Our average revenue per user was stable when consumers generally are cutting costs. We left behind any near-term questions about our financial stability -- we paid $1 billion in debt in the quarter and we have enough cash on hand today to pay all debt due through at least 2010. Virtually every customer care metric is up notably for the year -- and third party studies are validating that progress. Our networks are performing at best-ever metrics, and third parties are validating that, too. Our recent advertising is showing great results for brand recall, our new prepaid Boost Monthly Unlimited service is performing remarkably well, and we have the Palm Pre and other devices coming later this year that are going to bring customers into the stores. To characterize our results as so dire, ignores the facts that we are making such great strides to improve our business, and the third party validation of that.
Posted by Anonymous | February 19, 2009 - 2:14pm
Sprint’s “spew of spin†in the past few months…
The Instinc is flying off the shelves…
Our network is performing at best ever levels…
Our Customer Care issues are fixed and we are winning awards...
In the mean time, another 1.3 million subscribers gave Sprint “the bird fingerâ€.
Per SEC filings, seems as if some of Sprint’s “highest paid execs in the wireless†saw fit to further enrich themselves with signing bonuses and bloated severance packages (at the expense of shareholders and employees) even after yet another record loss in subscribers and revenue. I call it “compensation without justificationâ€.
Sprint exemplifies everything that is wrong with corporate America; over paid, unaccountable executives that are only in the game for the short term, anti-American labor practices (outsourcing American jobs to India, Poland and the Philippines, firing American workers on American soil while continuing to sponsor cheap Indian labor working in the US on the H1 and L1 Visa program that by most accounts, is rife with fraud).
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