Sprint Nextel takes merger-related hit

Sprint Nextel took a hit from merger-related expenses, announcing a 55 percent drop in fourth-quarter net income. The carrier also announced revenue for 2006 will be far below what analysts had forecasted. Revenue will come in at about $41 billion, and analysts were forecasting $46.8 billion in revenue. Sprint Nextel added 2 million customers, ending the year with 47.6 million customers.

Analysts I'm sure are watching the mix of customers coming on the network, perhaps fearing that the majority of customer adds may be prepaid customers in the future. Prepaid typically brings in higher churn and lower ARPU. The company added 746,000 users under the Sprint and Nextel post-paid brands, 624,000 under the Boost Mobile brand and 651,000 through wholesale channels and from PCS affiliates. Boost Mobile is Sprint Nextel's subsidiary that offers a prepaid push-to-talk service targeted at younger users.

For more about Sprint Nextel's results:
- read this piece from The Wall Street Journal (sub. req.)