Light Reading
Carrier bids goodbye to 2008 with a $2.8 billion net loss on revenues of $35.6 billion

Hard Times: Sprint Loses 1.3M Customers in Q4

Phil Harvey
LR Mobile News Analysis
Phil Harvey
2/19/2009
50%
50%

Sprint Corp. (NYSE: S) lost nearly 9 wireless customers per minute during 2008, a sign that the carrier is far from healthy, even as it pays down debt and looks forward to being free cashflow positive this year. (See Sprint Reports Q4.)

The company's customer base dropped to 49.3 million customers at the end of 2008, compared to 53.8 million at the end of 2007. It lost 1.3 million wireless customers last quarter alone.

And Sprint is still losing money hand-in-hand with its customer defections. The nation's third largest wireless carrier recorded a net loss of $1.6 billion, or 57 cents a share, on revenues of $8.4 billion for the fourth quarter of 2008, compared to a net loss of $29.3 billion, or $10.31 a share, on revenues of $9.8 billion for the year-ago quarter.

For the full year 2008, the company's net loss was $2.8 billion, or 98 cents, on revenues of $35.6 billion, compared to a net loss of $29.4 billion, or $10.27 a share, on revenues of $40.1 billion, for the full year 2007.

The carrier says it generated $536 million in free cashflow (operating cashflow minus capital expenditures) in the fourth quarter and expects to be free cashflow positive in 2009.

As you might expect in tough times, Sprint's capital expenditures have slowed considerably. It spent $452 million on wireline capex for all of 2008, a 28 percent drop from its 2007 level. For wireless capex, the company spent $1.8 billion in 2008, a 63 percent drop from the previous year. It also noted that $560 million of that capex was related to WiMax deployments and won't occur again, because of the Clearwire LLC (Nasdaq: CLWR) transaction.

CEO Dan Hesse said during the conference call that a disproportionate amount of corporate churn, thanks to the bad economy, was affecting its business user base, which is normally stable. That may help explain the high customer loss for 2008.

"We're working very hard to convert those customers to Sprint after they leave their jobs," Hesse said, referring to workers laid off from Sprint's corporate customers.

The company didn't give clear guidance, but said it does expect that its post-paid and total subscriber losses will improve in 2009, "as compared to 2008."

The company said it expects full-year capital expenditures in 2009 to be consistent with 2008 levels, excluding WiMax, meaning it expects to spend far less than $3 billion next year in total capex.

— Phil Harvey, Editor-in-Chief, Light Reading

(6)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
freetoair
50%
50%
freetoair,
User Rank: Light Beer
12/5/2012 | 4:11:19 PM
re: Hard Times: Sprint Loses 1.3M Customers in Q4
See 16Feb interview with Dan Hesse:
http://www.mercurynews.com/bus...

Hesse spent a big part of our interview talking about Sprint's 4G network, which is currently deployed in Baltimore and will soon launch in Portland, Ore. A national rollout is scheduled over the next couple of years. The service uses WiMAX technology, which is a high-speed broadband that can handle data with average speeds from 2 to 4 megabits per second.

So he spent the interview talking about "Clearwire" WiMAX network - meanwhile Sprint's dropping subs and cash at increasing alarming rates???

Is he in outer space??? Scary...
DCITDave
50%
50%
DCITDave,
User Rank: Light Beer
12/5/2012 | 4:11:18 PM
re: Hard Times: Sprint Loses 1.3M Customers in Q4
Well, Sprint has an MVNO arrangement so they can sell Clearwire service under their brand name.

That'll be huge because if Sprint is to get better, its brand name has to stand for something besides also-ran phones and horrible customer service.

So Clearwire could be a huge help there.

ph
t_newt
50%
50%
t_newt,
User Rank: Light Beer
12/5/2012 | 4:11:17 PM
re: Hard Times: Sprint Loses 1.3M Customers in Q4
"Sprint will likely have to compete on the basis of price and they are going to have to get their operating expenses down to survive"

Yes, but execution is everything. They tried this approach before--cutting Nextel, cutting customer service, etc. until they finally realized that they were driving all their customers away (at least their new CEO seems to understand this).
gocowboys
50%
50%
gocowboys,
User Rank: Light Beer
12/5/2012 | 4:11:17 PM
re: Hard Times: Sprint Loses 1.3M Customers in Q4
This is really a pretty garbled message from Hesse.

The Clearwire WiMAX network is based purely on a best effort architecture. It is designed for internet access only and not for voice. So, this is probabaly fine for air cards, but it is not suitable for voice/data handsets. This will not allow Sprint to compete with Verizon LTE or AT&T.

Sprint currently does not have any strong differentiation. AT&T has the iPhone, Verizon has great coverage and LTE (someday). Sprint will likely have to compete on the basis of price and they are going to have to get their operating expenses down to survive.

Maybe they should have offered me the CEO position. :-)

gocowboys
50%
50%
gocowboys,
User Rank: Light Beer
12/5/2012 | 4:11:13 PM
re: Hard Times: Sprint Loses 1.3M Customers in Q4
Sprint spends billions on their network operational costs; outside of customer service etc... There are a number of areas that I would consider low hanging fruit. If you hit the customer experience (ex: customer support) you will absolutely drive customers away.

Hesse has been trying to find differentiation where there appears to be none. Nextel push to talk - nope, everyone has that one now. Oh ya, I love the commercial where he tells everyone to come in to the stores and their staff will teach you how to use your phone. Kinda like saying that you are too stupid to figure out the phone, but we will help you out. That one surely did not help. In addition, the black and white format conveys images of days gone by. Is that the right image for a technology company?

They need to do an Alltel; cheap and cheerful.

Just my humble opinion
miles4000
50%
50%
miles4000,
User Rank: Light Beer
12/5/2012 | 4:11:13 PM
re: Hard Times: Sprint Loses 1.3M Customers in Q4
Hope the Palm Pre helps Sprint, it will be their iconic phone.
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
LRTV Documentaries
Sprint's Network Evolution

7|24|14   |   14:59   |   (0) comments


Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
LRTV Documentaries
BTE Keynote: The Software-Defined Operator

7|24|14   |   18:43   |   (1) comment


Deutsche Telekom's Axel Clauberg explains the concept of the software-defined operator to the Big Telecom Event (BTE) crowd.
Light Reedy
Numbers Are In: LR's 2014 Salary Survey

7|24|14   |   1:25   |   (6) comments


Our fourth annual Salary Survey paints a picture of who's hiring, firing, earning, and yearning for a change in the telecom industry.
LRTV Custom TV
Driving the Network Transformation

7|23|14   |   4:29   |   (0) comments


Intel's Sandra Rivera discusses network transformation and how Intel technologies, programs, and standards body efforts have helped the industry migration to SDN and NFV.
LRTV Custom TV
Distributed NFV-Based Business Services by RAD

7|18|14   |   5:38   |   (0) comments


With the ETSI-approved Distributed NFV PoC running in the background, RAD's CEO, Dror Bin, talks about why D-NFV makes compelling sense for service providers, and about the dollars and cents RAD is putting behind D-NFV.
LRTV Custom TV
MRV Accelerating Packet Optical Convergence

7|15|14   |   6:06   |   (0) comments


Giving you network insight to make your network smarter.
LRTV Custom TV
NFV-Enabled Ethernet for Generating New Revenues

7|15|14   |   5:49   |   (0) comments


Cyan's Planet Orchestrate allows service providers and their end-customers to activate software-based capabilities such as firewalls and encryption on top of existing Ethernet services in just minutes.
LRTV Custom TV
Symkloud NVF-Ready Video Transcoding, Big Data

7|9|14   |   3:41   |   (0) comments


Kontron and ISV partner Vantrix demonstrate high-performance video transcoding and data analytic solutions on same 2U standard platform that is ready for SDN and NFV deployments made by mobile, cable and cloud operators.
LRTV Huawei Video Resource Center
The Evolving Role of Hybrid Video for Competitive Success

7|4|14   |   4:09   |   (0) comments


At Huawei's Global Analysts Summit in Shenzhen, China, Steven C. Hawley from TV Strategies speaks to us about the evolving role of hybrid video for competitive success.
LRTV Huawei Video Resource Center
How CSPs Leverage Big Data in the Digital Economy

7|4|14   |   4:48   |   (2) comments


Justin van der Lande from Analysys Mason shares with us his views on how telecom operators can leverage customer asset monetization with big data. His discusses the current status of big data applications and the challenges and opportunities for telecom operators in the digital economy era.
LRTV Huawei Video Resource Center
Accelerator for Digital Business Future Oriented BSS

7|4|14   |   3:08   |   (0) comments


Mobile and internet are becoming intertwined; IT and CT are integrating; and leading CSPs have begun to transform to information service and entertainment providers. How should the BSS system evolve to enable this transformation? Karl Whitelock, an analyst at Frost & Sullivan, shares his views.
LRTV Huawei Video Resource Center
Orange Tunisia Discusses Multi-Band Antenna With EasyRET Solution

7|4|14   |   2:45   |   (0) comments


As new site acquisition becomes more difficult, Orange Tunisia has requested multi-band antenna to support UMTS and LTE innovation. Some things considered include reducing the cost of antenna maintenance and having high reliability antenna and EasyRET solution.
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
Packet Design asks network professionals how they handle the cloud, SDN, and network management.
Today's Cartoon
Vacation Special Caption Competition Click Here
Latest Comment
Hot Topics
The Municipal Menace?
Jason Meyers, Senior Editor, Utility Communications/IoT, 7/22/2014
Cisco Puts a Fog Over IoT
Sarah Reedy, Senior Editor, 7/23/2014
Apple Earnings: Strong iPhone Sales, iPad Sales Slump, $7.8B Profit
Mitch Wagner, West Coast Bureau Chief, Light Reading, 7/22/2014
Salary Survey Report 2014
Sarah Reedy, Senior Editor, 7/23/2014
Facebook: 30% of Users Are Mobile-Only
Mitch Wagner, West Coast Bureau Chief, Light Reading, 7/24/2014
Like Us on Facebook
Twitter Feed