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Sprint Nextel Corp. (NYSE: S), the trying to be the"comeback kid" under CEO and telecom vet Dan Hesse, just lost another swath of customers in its latest quarter. The company reported almost an almost $600 million net loss in its latest quarter as its postpaid (contract) customers continue to defect to the competition.All in all, this quarter wasn't as bad for Sprint as previous quarters. The third-largest wireless carrier in the U.S lost 182,000 wireless customers last quarter, leaving it with under 50 million total wireless customers. Still, the last quarter of 2008 saw Sprint lose about 1.3 million customers, so this past quarter was quite the marked improvement.
The kicker is this, though: Sprint actually lost 1.25 long-term contract customers in the first quarter of 2009, but offset that with a gain of 764,000 prepaid customers from its Boost Mobile brand. The $50 unlimited everything Boost Mobile plan unveiled in January has been a huge success for Sprint -- but at the cost of having customers with no long-term attachment.
Dan Hesse seemed concerned about Sprint's customer losses but argued that Sprint is in it to win it when it comes to taking advantage of the large movement in the U.S. towards prepaid wireless. Hesse did acknowledge that "We need to do better" in relation to retaining contract customers, however. Revenue for Sprint's latest quarter did come in at $8.21 billion, a decline from the year-ago period of $9.3 billion. The question that will remain going forward is if Sprint can successfully trade out postpaid wireless customers for prepaid ones and keep a loyal base while maintaining profitability. That would be completely the opposite strategy of larger competitors Verizon Wireless and AT&T, Inc. (NYSE: T), but it may be the trick that saves Sprint -- for now.
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Reader Comments (Page 1 of 1)
5-23-2009 @ 2:10AM
Tristan A said...
One of the largest cell phones carrying in the nation is the Sprint. Sprint does not take kindly to their database being hacked, and that's what Gary Morrow and Timothy Flowers (who worked in Sprint's billing department) did. The two said that they would eliminate cell phone bills for them, hacking into the database and messing with payment records so they didn’t have to pay. They'll need installment loans for attorneys now, as both have been charged with felony theft and computer crime charges. They operated out of Overland Park, Kansas, but authorities caught on to their scheme and they were booked. Sprint has been mum, but they'll need short term loans to keep out of prison. Click here: http://personalmoneystore.com/moneyblog/2009/05/14/sprint-cell-bill-erase-scam/