Sprint Nextel Corp. (NYSE: S) continues to lose customers quarter after quarter, even as it has introduced some of the most competitive family calling plans in the U.S. wireless industry.
Perhaps that price competitiveness will win more customers back in 2009, but until then, the carrier will have to rein-in most costs to make up for losing customer revenue. First up: jettisoning $20 million in unused software costs.
It's amazing that a company Sprint's size just now sees that legacy software and unused/underused applications are actually costing the company $20 million a year, but that's precisely what it has determined. Only using (and, gasp, paying for) software that is essential to a business is one of the cost measures every corporation should constantly look at. Many companies I've worked with in the past have even gone so far as to dump Microsoft Corp. (NASDAQ: MSFT) Office and use the OpenOffice software suite, which does not cost a thing and comes with almost the same functionality. That's a small but important start.
The year-long internal audit at Sprint showed a total of 127 underused (or even unused) applications inside its IT umbrella that were showing little to no value to the company. That's right -- 127. As a result of the audit, six data centers were closed and close to $20 million was cut from the company's bottom line. Dan Hesse, on the job as CEO now for 16 months, is probably proud. He'd be prouder if Sprint could somehow manage to keep customers and get new ones, as well, in order to drive Sprint shares to the $7 level and beyond. Today, they are sitting under $4.30.
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