John Paczkowski

Recent Posts by John Paczkowski

Sprint: Tourniquet, Please, Redux

ackroyd_juliachildjpgIt’s almost as if Sprint Nextel’s postpaid customers can hardly wait for their contracts to expire so they can jump to another carrier. The troubled wireless carrier lost more than one million postpaids in the first quarter of 2009 amid fierce competition from rivals AT&T (T) and Verizon Wireless (VZ). “We are far from satisfied with our postpaid performance,” Sprint CEO Dan Hesse said during a conference call with analysts. “We need to do better.”

Indeed. Because while Sprint (S) offset many of those postpaid defections with big gains in the prepaid and wholesale markets–the company lost only 182,000 subscribers, net, thanks to additions from Boost Mobile and to its partnership with Amazon (AMZN) for the Amazon Kindle–postpaid subscribers are the industry’s most valuable. They usually spend more on their service, and because they’re typically bound by contract, they’re less likely to cancel service as customers who aren’t. So, the fact that Sprint’s postpaid subscribers have been fleeing the company in droves for six straight quarters is not a good sign. That said, this is the the largest quarter-to-quarter improvement in net customer additions at Sprint Nextel in recent memory (click on chart below), so things are improving, if only a bit.

sprint

Sprint posted a loss of $594 million or 21 cents per share in its first quarter, a decline of 18 percent, compared with a loss of $505 million or 18 cents per share for the same period a year ago. Revenue was $8.21 billion, down about 12 percent, and a fair bit less than the $8.28 billion analysts had been expecting.

One hopes the debut of Palm’s (PALM) new Pre handset in the months ahead will do something to change that.


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