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Nextel Drags on Sprint as 4G Push Continues

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor

The shutdown of the Nextel network continued to weigh down Sprint Corp.'s bottom line during the second quarter even as the operator cracks on with its 3G and 4G LTE upgrades in the U.S.

The third-ranked U.S. operator on Tuesday morning reported a net loss of $1.6 billion, or $0.53 per share, on revenue of $8.88 billion. This compares to a loss of $1.4 billion, or $0.46 per share, on revenue of $8.84 billion in the same quarter a year ago.

Excluding network shutdown and merger costs, Sprint would have reported a loss of $0.31 per share. Analysts polled by Thomson Reuters had been expecting a loss of $0.30 a share.

Sprint shut down the Nextel iDEN network on June 30, and perhaps not coincidentally the operator reports that it lost more than 1 million monthly contract subscribers during the quarter.

"Nextel is the gift that keeps on giving," Sprint CEO Dan Hesse dead-panned on the second quarter call.

Nonetheless, the operator is hoping that the completion of its mergers with Clearwire Corp. and SoftBank Mobile and continuing 3G and 4G LTE "Network Vision" will give it a platform to grow from in the future.

The operator's President of Network Operations, Steve Elfman, says Sprint will cover 200 million potential customers with 4G LTE by the end of the year. He says that kind of network density will allow Sprint to hit "critical mass" with the 4G technology and allow Sprint to market much more around LTE.

"You'll see more networking messaging from Sprint to customers, making them aware," agreed CEO Hesse on the call. "LTE is really what drives usage, much more so than the rate plan."

Sprint has just added 41 markets to its LTE footprint, bringing it to 151 markets covered. "Six hundred cities are now under construction," said Elfman on the call.

"Late in the third quarter, we'll start introducing LTE on 800[MHz]," he added.

Sprint will start offering Clearwire's 2.5GHz LTE service, too, now that it is starting to introduce devices that support the new LTE frequencies. "Clearwire had roughly 2,000 TD LTE sites commissioned at the time of closing," Elfman noted on the call.

— Dan Jones, Site Editor, Light Reading Mobile

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7/30/2013 | 9:09:30 PM
re: Nextel Drags on Sprint as 4G Push Continues
A masterpiece of value destruction by Sprint - almost total anhilation of the Nextel customer base along with obliteration of Nextel network and sales channels.
7/30/2013 | 4:46:41 PM
re: Nextel Drags on Sprint as 4G Push Continues
On iPhone sales:
7/30/2013 | 4:44:44 PM
re: Nextel Drags on Sprint as 4G Push Continues
Grabbed a couple of relevant slide shots from the Q2 presentation. On NV stats:
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