Hesse: Sprint's issues more difficult than expected

In his first conference call with investors since he took the helm two months ago, Sprint Nextel CEO Dan Hesse admitted that the problems at the third largest U.S. wireless operator are more difficult than he expected, adding that 2008 will continue to be difficult even though he expects more promising results long term. He emphasized the changes he has made so far: eliminating 4,000 employees, reducing the number of distribution points, including 125 company-owned stores and consolidating Sprint's headquarters to Overland Park, Kan. "I see great assets: people, technology, customer base and spectrum position," Hesse said.

The company is jumping on the unlimited rate plan bandwagon but with a slight twist. Sprint's "Simply Everything" plan provides unlimited voice, data, text, email, Web-surfing, Sprint TV, Sprint Music, GPS Navigation, Direct Connect and Group Connect for $99.99 a month. The company also has an unlimited voice only plan for $89.99 per month. Carriers Verizon Wireless and AT&T have unlimited voice plans for $99.99. T-Mobile USA has an unlimited voice and text message plan for $99.99.  

Here are the highlights of the firm's fourth quarter and year-end 2007 results:  

Wireless revenues: Fourth quarter revenues were $8.5 billion, a 2 percent decline over the previous quarter and a 6 percent decline over fourth quarter 2006.   

Subscribers: Sprint's wireless subscriber base declined 108,000 in fourth quarter. The carrier's total subscriber base at year-end was 53.8 million. This compares with 53.1 million at year-end 2006. At fourth quarter Sprint had about 35 million CDMA subscribers, 17.3 million iDEN subscribers and 1.4 million PowerSource subscribers who access both platforms. 

Churn: Fourth-quarter post-paid churn was 2.3 percent, the same as third quarter for both iDEN and CDMA. Boost prepaid churn was 7.5 percent compared with 6.2 percent in third quarter 2007. 

ARPU: Post-paid ARPU was $58, down from $59 in third quarter. iDEN postpaid ARPU dropped 7 percent. Prepaid ARPU was slightly under $28 in the fourth quarter, down from $30 in third quarter. 

Data: Data contributed more than $11 to postpaid ARPU. On the CDMA base, data ARPU was $14, an increase of 21 percent. Data now accounts for 20 percent of total ARPU.

For more on Sprint's unlimited plans:
- read this release [1]

For more on Sprint's Q4:
- read this release [2]

Related:
See what wireless industry experts have to say about unlimited rate plans. Sound Off [3]