A day after Sprint Nextel Corp. (NYSE: S) agreed to purchase 100% interest in prepaid wireless company Virgin Mobile, the third-largest wireless company in the U.S. reported that it lost almost a million valuable postpaid wireless customers in its most recent quarter.
Sprint, which has bled millions and millions of customers over the past two years, has managed to offset that blow in the past few quarters by signing up record customer numbers to its Boost Mobile prepaid unit, which shook the industry up at the start of the year with a $50 per month unlimited everything wireless plan.
But that's not stopping more valuable contract customers from continuing to leave in droves. Even with the mid-June release of the Palm Inc. (NASDAQ: PALM) Pre smartphone -- widely credited with being the first true competitor to the Apple Inc. (NASDAQ: AAPL) iPhone -- Sprint didn't highlight that launch this week in reporting its quarterly results. This is no surprise, since the device launched at the very end of the quarter. Still -- can Palm help save all the customer defections from Sprint to larger competitors like AT&T Inc. (NYSE: T) and Verizon Wireless -- each of which added over one million subscribers in their respective recent quarters?
Sprint's loss for the quarter was $384 million, or 13 cents a share, as sales fell 10%. Sprint lost 991,000 contract subscribers, but gained 777,000 prepaid lines from its Boost Mobile unit -- which equals an overall customer loss total of 257,000 customers. But the larger question remains: how much more valuable were the contract customers it lost over the prepaid customers it gained? Try this: contract customers spent an average of $56 per month in the quarter, while prepaid customers averaged $34. That's the whopper.
Retailers can't wait for Black Friday, open Thursday
Tiffany's serves up solid quarterly earnings
Cramer on BloggingStocks: This bullish retail story looks like a good fit 
Reader Comments (Page 1 of 1)
7-31-2009 @ 4:37PM
DHANANI22 said...
Palm pre is no competition of Apple IPhone - its a joke,
8-17-2009 @ 7:35PM
Wayne said...
I wonder if Sprint will be able to pull up out of the very obvious dive they are in at the moment? I think the non-existent customer service and network problems are the real problems here. That is certainly why I left them and got myself a prepaid Tracfone. Much cheaper, better network, less fuss.
9-26-2009 @ 2:47PM
Shayla said...
Sprint SUCKS! They charge you a lot for phones,contracts,getting out of contracts!Its ridiculous;they don't even have the iPhone which everyone wants right now & its no competition when it comes to the Palm Pre!