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Sprint sheds 901,000 more wireless customers

Company posts $344 million 2Q loss; has lost $849 million so far this year

By Brad Reed, Network World
August 06, 2008 11:47 AM ET

Network World - Sprint is still hemorrhaging postpaid wireless subscribers -- those who pay monthly and are most profitable -- as the company reported losing 776,000 in the second quarter in its earnings announcement today.

Overall, the company said that it lost 901,000 total wireless subscribers in the quarter, with the vast majority coming from the company's postpaid wireless segment. Sprint has reported postpaid subscriber losses in seven of the past eight quarters, as the company has lost roughly 1.8 million postpaid wireless subscribers so far this year and more than 3 million subscribers since the second quarter of 2007.

The loss of wireless subscribers is taking a big bite out of the company's wireless revenues. Sprint’s $7.7 billion in wireless revenues for the second quarter of 2008 represents a 12% decrease from its $8.8 billion in revenues from the second quarter of 2007, and the company's wireless segment posted a net loss of $142 million for the quarter. Cumulatively, Sprint’s wireless segment has lost $395 million in 2008.

But while its postpaid wireless segment has continued to lose customers, Sprint points to its lowered postpaid wireless churn rate as a sign of improvement. The wireless segment's 2% churn rate for the second quarter of 2008 matched its churn rate from the second quarter of 2007, and marked a significant improvement from the 2.45% churn rate that it posted last quarter.

Sprint CEO Dan Hesse said that the reduced churn is a reflection of Sprint's efforts to improve customer service and to promote competitive new offers such as its Simply Everything plan that offers unlimited voice minutes, data services, e-mail and other services for $99.99 per month.

"We are seeing signs of progress from our efforts to improve the customer experience, rebuild the Sprint brand and increase our profitability," he said. "Our sequential improvement in post-paid churn is the best reported by any national wireless carrier since 2004, and it equals Sprint's best-ever churn performance post-merger."

Sprint's well-publicized troubles with its wireless business have recently fueled rumors that the company is considering spinning off its Nextel unit, with Nextel founder Morgan O'Brien, who is currently the CEO of telecom company Cyren Call, said to be an interested party. Additionally, the company has been linked numerous times to merger rumors involving South Korea’s SK Telecom.

Sprint posted a total net loss for $344 million for the quarter, and the company has lost a total of $849 million so far in 2008. Sprint is currently the third-largest wireless carrier in the United States, with just under 52 million wireless subscribers nationwide.

Read more about wireless & mobile in Network World's Wireless & Mobile section.

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