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Sprint customers continue to flee, base drops to 51.9M
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Sprint Nextel disappointed investors once again with some less-than-stellar second quarter results. In particular, the company continues to lose customers at a rapid rate--it lost 901,000 customers in second quarter, giving it a total of 51.9 million customers, compared with 54 million the end of the same quarter last year. On the revenue front, the operator had a second-quarter net loss of $344 million, compared with a year-earlier profit of $19 million. Revenue fell 11 percent to $9.06 billion. Wireless revenue was $7 billion, also a decline of 11 percent year over year.
In a call with financial analysts and investors this morning, Sprint executives tried to mitigate the damages by singing the praises of the company's "Simply Everything" unlimited voice and data plan and the introduction of Samsung's Instinct smart phone. CEO Dan Hesse repeatedly talked about how Simply Everything is encouraging stabilization among its customer base and has performed better than expected. In addition, he talked at length about how the Samsung Instinct is driving more data usage among customers.
Sprint also said it plans to make an offering of $3 billion in cumulative perpetual convertible preferred stock but executives wouldn't go into any details on that offering. Last month Sprint agreed to sell almost all of its towers to private tower company TowerCo for about $670 million in cash. The company planned to use the proceeds to pay off debt.
Here's a rundown of the key metrics:
Churn: Postpaid churn was 2 percent, which is an improvement but still far higher than its competitors. Verizon had a postpaid churn of 0.83 percent while AT&T had a postpaid churn of 1.1 percent. Boost Mobile churn was 7.4 percent, compared with 9.9 percent in the first quarter.
Subscribers: The company lost 901,000 customers, 776,000 of those were postpaid and 250,000 were prepaid. At the end of the quarter, the company had 38.9 million postpaid subscribers, 4.2 million prepaid subscribers and 8.7 million wholesale and affiliate customers. iDEN customers totaled 14.6 million, while 1.7 million were PowerSource customers who use both CDMA and iDEN. The carrier had 35.5 million CDMA customers.
ARPU: Postpaid ARPU was $56 per month. Data contributed $12 to ARPU. CDMA data ARPU was $15 per month, an increase of nearly $1 over first quarter.
For more:
- see this release
Related articles:
Sprint stumbles again despite data growth
Sprint sells off towers to pay down debt
Comments
Posted by Anonymous | August 6, 2008 - 6:24pm
The news is actually not that bad. Hesse made it clear it would take several quarters to tuen the ship around. Perception lags behind reality but reality is customer service is improving, the rate plans are highly competitive, data services are second to none and leadership seems strong. I would give it 2 more quarters before I would say the ship is sinking. Sprint is on the rise!
Posted by Kimbjo | August 7, 2008 - 12:59am
^^ Dear Dan Hesse. If you're going to post to fiercewireless, just use your real name dude. Don't use 'anonymous', it makes it look less credible!
Posted by WilliamC | August 7, 2008 - 7:44am
We can't let this happen!!! Most important Sprint representatives should ask their customers some exit questions and what they could do to keep them or make their mobile experience better. I definately don't think the Iphone is causing this mass exodus. Don't forget we are still in trying times in the United States plus the foreclosure and credit mess has not subsided. Also, some of the oil fields are being attacked in Africa. Lastly, costs have increased greatly for many in this great country of ours...So some of this turmoil is affecting their customers wallets and purses. We keep hearing that customer service is the culprit. I beg to differ. Some customers want more than Sprint can give them. That's too bad because other cellular carriers don't have to meet those demands. If they met each and every demand from its customer they would not be in existence to day. It's very sad because no other cellular phone company is going through this nonsense except Sprint. If you don't believe me just check the blogs and chat rooms about Sprint. Some of these people want the kitchen sink from Sprint!!!
Posted by Glenn | August 8, 2008 - 7:00am
Sprint customer service is bad. There are no ways to make that pretty. I am not a Sprint customer but I had a horrible experience helping a friend pay a bill, and I vowed never to ever consider Sprint. And I hear the same things echoed by everyone I know who uses SPrint. For most people, a cellphone is a utility, not a luxury. With choices and number portability, there is no reason to continually endure bad customer service.
Posted by ET_MTB | August 22, 2008 - 12:52pm
Customer service is there biggest hurdle to success. Simplify the customer experience and innovate to make on-line transaction work. Who wants to spend 20 minutes on the phone with a service rep with attitude.
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