& cplSiteName &

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        ADD A COMMENT
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 Sabre
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 Sabre
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.
From The Founder
The time has come for a telecom app store to save the industry.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Documentaries
Service Provider Panel: Partnering in the Digital Era

5|22|17   |     |   (0) comments


Coopetition has always been part of telecom, but the ecosphere now includes data centers, vendors, apps developers, cloud service providers and Internet content providers. This BCE 2017 panel explores the new attitudes among network operators as to the value and variety of ...
LRTV Interviews
Site Demo: AT&T's IoT Flow Platform

5|19|17   |   04:25   |   (0) comments


At AT&T's R&D center in Tel Aviv, Israel, project leader Eyal Segev talks about the operator's Flow platform and how it helps to prototype IoT applications.
LRTV Documentaries
Agent of Change: A Q&A With AT&T's John Donovan

5|18|17   |     |   (0) comments


Carol Wilson talks with the man leading AT&T's transformation efforts about the challenge of change.
LRTV Documentaries
BCE Service Provider Panel: The New Business Realities

5|18|17   |     |   (0) comments


For virtualization to happen, the telecom industry first has to grapple with key functional aspects of SDN and NFV that need to be universal, such as onboarding of virtualized network functions and federation of software-defined networks.
LRTV Interviews
BCE Service Provider Keynote: CenturyLink

5|16|17   |   22:32   |   (0) comments


Aamir Hussain leads the Product Development and Technology organization at CenturyLink, which includes the company's information technology function. He is an experienced senior technology executive with more than 25 years of proven success in the implementation of global technology operations, operationalization of complex technology, infrastructures and business ...
LRTV Interviews
CenturyLink CTO on Transformation

5|16|17   |   7:43   |   (0) comments


The 50-year-old telco has already gone through several transformations, including every time it made an acquisition, but its purchase of Level 3 coupled with changes in technology and customer expectations necessitates its biggest transformation yet.
LRTV Documentaries
Light Reading Hall of Fame 2017

5|15|17   |   5:05   |   (1) comment


Find out who made it into Light Reading's Hall of Fame this year.
LRTV Interviews
Site Visit: AT&T's Tel Aviv R&D Center

5|15|17   |   09:58   |   (1) comment


Nir Shalom, general manager and VP of application development at AT&T Israel, talks about the key service developments undertaken at the AT&T R&D facility in Tel Aviv and how the team there has adopted new ways of working.
Telecom Innovators Video Showcase
Act on Your Intelligence With Amdocs aia!

5|15|17   |     |   (0) comments


Amdocs CMO Gary Miles explains how communications service providers can seize the AI opportunity with Amdocs real-time digital intelligence platform.
LRTV Interviews
Logtel CEO: Making Sense of IoT

5|15|17   |   09:48   |   (0) comments


Jacques Bensimon, founder and CEO of Tel Aviv-based training and consultancy Logtel, talks about the need to make IoT more than just a buzzword.
LRTV Huawei Video Resource Center
The Challenges of Mobile Banking Implementation

5|12|17   |     |   (0) comments


Kamal Quadir of bKash Limited explains the challenges and needs of implementing mobile banking in the Bangladesh market.
LRTV Interviews
Tel Aviv: A Hub of Innovation

5|10|17   |   07:58   |   (0) comments


Light Reading's Ray Le Maistre and Dan Allen discuss the technology innovation, food and amazing sights they witnessed during a recent trip to Israel.
Infographics
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
AT&T's Donovan: Women Adapt Faster Than Men
Sarah Thomas, Director, Women in Comms, 5/18/2017
Verizon on M&A: Who Needs a Cableco?
Mari Silbey, Senior Editor, Cable/Video, 5/17/2017
Standardization Needs Room for Innovation
Mitch Wagner, Editor, Enterprise Cloud, 5/17/2017
Fright Wigs & Cocktails: BCE 2017 in Pics
Mitch Wagner, Editor, Enterprise Cloud, 5/19/2017
Sonus & Genband Finally Combine to Form $745M Company
Dan Jones, Mobile Editor, 5/23/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
One of the nice bits of my job (other than the teeny tiny salary, obviously) is that I get to pick and choose who I interview for this slot on the Light Reading home ...
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
Animals with Phones
What Brogrammers Look Like to the Rest of Us Click Here
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.