Hard Times: Sprint Loses 1.3M Customers in 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