Sprint customers continue to flee, base drops to 51.9M

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