Analysts see Sprint suffering in 1Q thanks to aggressive 4G marketing

Analysts are expecting Sprint Nextel (NYSE:S) to record its first quarterly subscriber growth in more than three years for the fourth quarter 2010, but as competition increases in the 4G marketing arena, Sprint is poised to lose subscribers in the current quarter.

According to eight analysts contacted by Reuters, Sprint is expected to report fourth-quarter long-term contract subscriber net additions of nearly 17,000. The operator will report its fourth-quarter results Feb. 10.

However, Piper Jaffray analyst Christopher Larsen expects Sprint to lose 100,000 contract customers in the first quarter as AT&T, T-Mobile USA and Verizon Wireless step marketing their services as 4G.

"It's a little premature to celebrate that they're out of the woods. They were the only 4G game in town last year and they made some good gains out of that," Larsen told Reuters. "This year they're going to lose that advantage and will have to compete on other things like price."

The first quarter is also historically a weaker quarter after the holiday season surge in sales. But another pain point for Sprint will be Verizon Wireless' move to sell the Apple (NASDAQ:AAPL) iPhone for the first time Feb. 10.

"Sprint still has work to do," said Mizuho analyst Michael Nelson. "I see them going back negative (contract subscriber losses) in the first quarter until the fourth quarter, and not turning positive for a full year until 2012."

Sprint is expected to post a fourth-quarter loss of 30 cents per share, compared with a loss of 34 cents in the fourth quarter 2009, according to analysts polled by Thomson Reuters I/B/E/S. Revenue is expected to increase almost 4 percent to $8.17 billion.

For more:
- see this Reuters article

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