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RadioShack blames Sprint for weak first quarter sales

Quarterly report a troubling sign for Sprint's upcoming Q1 results
By Brad Reed , Network World , 04/30/2008
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In what could be a preview of troubling first-quarter results for Sprint Nextel, electronics retail giant RadioShack said this week that sluggish growth in its wireless platform sales were primarily caused by a decrease in Sprint postpaid wireless sales.

In its quarterly 10Q form filed with the Securities and Exchange Commission this week, RadioShack reported that sales for wireless platforms in company-operated stores in the first quarter of 2008 increased by only 0.7% compared with the first quarter of 2007. While RadioShack said it saw a strong increase in AT&T's postpaid wireless sales and GPS products, this growth was "largely offset" by a drop in Sprint postpaid wireless sales, which RadioShack said reflected "the weakening of Sprint Nextel's wireless business across the market."

The company also reported that the first quarter 2008 sales within its kiosk segment, which primarily consists of handset sales, postpaid and prepaid commission revenue and related wireless accessory sales, decreased by 10.5% compared with the first quarter in 2007. Once again, RadioShack said poor Sprint-Nextel sales were partially to blame, along with "increased wireless competition" and "a challenging wireless industry environment."

Sprint, which is due to release its first quarter 2008 earnings on May 12, has been losing postpaid subscribers by the hundreds of thousands over the past year. In the fourth quarter of 2007, for instance, Sprint said it had lost a total of 683,000 postpaid subscribers, which more than offset the 500,000 customer increase it saw in the wholesale market. In the quarter leading up to former CEO Gary Forsee's resignation, Sprint announced that it had lost 337,000 postpaid customers. Overall, Sprint is the third-largest carrier in the United States, with a total of 53.8 million subscribers at of the end of 2007.

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