Sprint Nextel Corp. (NYSE: S) really hit on something back in January when it rolled out a $50 unlimited everything plan from its Boost Mobile prepaid brand. Customers could get nationwide unlimited minutes, texting, data and walkie-talkie for $50 a month.
Customers went nuts and started snatching up Boost Mobile phones and that plan by the thousands. Soon afterward, other prepaid competitors like T-Mobile and Virgin Mobile followed suit with cheap unlimited plans of their own.
While this kind of prepaid wireless is a great idea during an economic pinch like we're in now, Sprint Nextel was apparently not well prepared for the huge influx of new customers. As a result, the company is seeing some massive problems with its text messaging services, with many messages taking hours to receive via Sprint's aging iDEN network, a leftover from the Nextel acquisition of 2005.
Perhaps Verizon Wireless' Ivan Seidenberg was right -- Sprint Nextel could be killing itself here. While Sprint is still losing hundreds of thousands of contract wireless customers every quarter, the impressive gain it's seeing with Boost Mobile prepaid could turn out to be a disaster if the network that customer base rides on becomes swamped to capacity, as already appears to be happening. Sprint Nextel can't really afford to take a share price hit, as S shares sit at under $4.75 today.
Perhaps Verizon Wireless' Ivan Seidenberg was right -- Sprint Nextel could be killing itself here. While Sprint is still losing hundreds of thousands of contract wireless customers every quarter, the impressive gain it's seeing with Boost Mobile prepaid could turn out to be a disaster if the network that customer base rides on becomes swamped to capacity, as already appears to be happening. Sprint Nextel can't really afford to take a share price hit, as S shares sit at under $4.75 today.
Will Rich Ross really have a positive impact on Disney's movie operations?
Consumers sick of recession, may spend extra on holidays
Corrections, seasonality and Santa Claus
Add your comments