Sprint Nextel's (NYSE:S) CFO Bob Brust said the company's "steep" revenue declines are a thing of the past and that its operations are now stabilizing--thanks in large part to the company's prepaid business.
"We've entered a more stable period in our operations," Brust said at an investor conference. "The worst of that is over."
Sprint's total revenue was $8.09 billion in the first quarter, down 1.5 percent from $8.2 billion in the year-ago period. The company experienced sharper year-over-year revenue declines in previous quarters. Sprint's wireless service revenues clocked in at $6.4 billion in the first quarter, up by less than 1 percent from the year-ago quarter and up around 3 percent compared with the fourth quarter of 2009.
Brust said that, though the company has improved its gross addition numbers, it still faces a problem with churn. He said he expects a "big upside" in prepaid. The company recently launched a multi-front strategy for its prepaid business, with the relaunch of the Virgin Mobile brand as well as the launch of a pay-per-minute prepaid brand, Common Cents Mobile. Sprint also is promoting its Boost Mobile brand.
In addition to prepaid, Sprint is banking on the expansion of Clearwire's (NASDAQ:CLWR) mobile WiMAX network this year to help catalyze postpaid growth. Sprint, which is both the majority owner of Clearwire and a wholesale customer, is launching its first 3G/4G phone, the HTC Evo, on June 4, and hopes to make a big splash in the market before the launch of the next Apple (NASDAQ:AAPL) iPhone.
Brust said the company learned from the missteps it made last year with the Palm (NASDAQ:PALM) Pre, which came out shortly before the iPhone 3GS. "The Pre didn't work out as well as we hoped," he said. Brust said Sprint didn't have enough Pres to meet demand, which he said will not be an issue with the Evo.
For more:
- see this Dow Jones Newswires article (sub. req.)
- see this Bloomberg article
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