Sprint earnings: More progress in fourth quarter, but still dropping subscribers
Summary: Sprint's fourth quarter revealed a company that is making progress, but not enough to give AT&T and Verizon much of a fight. The wireless carrier slowed customer defections, but is still losing subscribers.
Sprint Nextel's fourth quarter revealed a company that is making progress, but not enough to give AT&T and Verizon much of a fight. The wireless carrier slowed customer defections, but is still losing subscribers and falling short of Wall Street estimates.
Sprint reported a fourth quarter net loss of $980 million, or 34 cents a share, on revenue of $7.9 billion. The loss includes a charge of $306 million for deferred taxes. Wall Street was expecting a fourth quarter loss of 19 cents a share on revenue of $8.03 billion, according to Thomson Reuters. Factoring out the charge, Sprint lost 23 cents a share, a sum that still fell short of estimates. For the year, Sprint lost 84 cents a share on revenue of $32.3 billion.
The good news?
Sprint lost 69,000 net retail subscribers in the fourth quarter. That's improvement over recent quarters. In the third quarter, Sprint lost 135,000 retail subscribers. The company ended the year with 48.1 million customers, down from 48.3 million in the third quarter.
On a conference call with analysts, Sprint CEO Dan Hesse touched on familiar points. Sprint is making progress in cash flow and subscriber losses as it improves customer service. Sprint delivered $666 million of free cash flow in the fourth quarter.
Hesse noted that Sprint "still has to do better on churn." Fourth quarter churn was 2.11 percent, down from 2.16 percent a year ago and 2.17 percent in the third quarter. "I wish we would have made more progress on churn," acknowledged Hesse. "It is our plan to improve churn in 2010."
Meanwhile, Hesse said that Sprint's Boost Mobile prepaid brand is facing increasing competition as rivals offer more competitive pricing. That trend is likely to continue, said Hesse. Overall, Sprint expects more competition for its "simply everything" pricing as Verizon and AT&T get more aggressive on price. Hesse noted that Sprint will still cost consumers less each month.
Hesse talked up Sprint's 4G services including the Overdrive hotspot, which was recently reviewed by Matthew Miller.
Review: Sprint Overdrive rocks 4G at more than double 3G speeds
As for the outlook, Sprint said that subscriber losses will continue to improve in 2010 and the company will continue to generate free cash flow.
By the numbers:
- 9 percent of post-paid customers upgraded their handsets in the fourth quarter.
- Prepaid churn was 5.56 percent, compared to 8.2 percent a year ago.
- Wireless post-paid average revenue per user in the fourth quarter was $55, down $56 a year ago.
- The company spent $427 million on capital expenditures in the fourth quarter, up from $304 million a year ago.
Related: AT&T earnings: E-readers, iPhone, netbooks propel wireless subscriber gains
Verizon earnings: Fourth quarter on target; Loss due to layoff costs; Wireless hums along
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Talkback
Soon to be defecting...
Sticking with Sprint
T-mobile is the cheapest and spottiest service. Verizon rips you off the most by nickle and dimeing you to death. ATT service is poor and the iPhone is way overpriced.
If Sprint can get Wimax going and its 4g network combined with a few cool gizmo type phones (search HTC Supersonic) then they can get the ship right. They have definitely made improvements in customer service--but nobody in this industry is actually good at customer service. :)
All in all, I've renewed for another 2 years and will enjoy my Google phones until something cooler comes out.
My thoughts pretty much exactly
Update
We started the online chat with the rep and asked about the high upfront cost of the phones. He assured us he could get us the phones for $100 upfront cost and then we could mail in for our $50 each rebate - basically, free phones. He almost had us!!!!! He could only authorize the plan change but not the new phones. We had to chat with a sales rep for that.
The sales rep said we could NOT get the phones for $100, the ohter guy was wrong. Would not, could not, did not agree to what the first guys promised even after reading the entire text!!!
Bottom line - after 4 HOURS , we told them KMA and have a nice day we're going with another carrier.
AT&T has more and nicer FREE phones. Even though we have to pay the activation fee, it's way less than $179 then wait for your check. We get the same services with more minutes at the same price. HELLO AT&T!
Same price? No way...
Update 2
Phone plans apparently vary by area. In SE VA, yes, I could get AT&T plan comparable to the Sprint plan for $99.99. I think it was even 100 more talk minutes. The Sprint plan is a few $$ cheaper if we keep our current "grandfathered" plan which they no longer offer.
We really don't want to switch carriers, so I gave them one last chance and called to speak to a supervisor to find out if they really wanted to lose a long-time customer over $79. After being transferred 4 times (and almost hanging up), I finally got someone who told me I could get the phones for free if I went to Best Buy or bestbuy.com.
Long story short, bestbuy.com turned out to be another transfer to unhelpful Sprint sales and the store was out of stock of the phones we wanted. We ended up at Radio Shack which is where we went 2 years ago after being ignored for 2 hours in a Sprint store.
Radio Shack staff are VERY helpful and we will be getting the phones for free and renewing our contract with Sprint. In 2 years, Radio Shack will be the first place we go instead of going through this again. It's pretty sad that you can get a better deal by NOT going through the carrier??!!?!?
So, Sprint gets to keep us for now because I'm sure the hassle would have been equal to switch to anybody else (porting numbers, entering all our info, credit check, UGH!) I think we were all better off with tin cans and string!!! :)
Wow. What rotten luck!
RE: Sprint earnings: More progress in fourth quarter, but still dropping subscribers
My experience - not even being a subscriber
After going through this experience, I will never consider Sprint, and I'm sure other customers victimized by their tactics will feel the same way. A company that mistreats their customers for years deserves the fallout they received. Maybe now, they 'finally' realize that treating their customers like dirt, thus losing their subscribers to other carriers, is not good for their bottom line. AT&T and Verizon, I hope you are paying attention!!!
Well, CS has gotten better...
I am very satisfied with Sprint. I've had one CS problem in the 7 or 8 years I've been with them, and that was probably about 5 years ago. Thinking about it, I haven't been connected to any call centers in India since then either. Though I use "web chat" almost exclusively now.
Not according to the poster below
After reading a similar story to mine (about a father passing away in Sept. 2009), it seems that there are [b]STILL[/b] problems with their customer service. I too had faxed a death certificate that also ended up in their black hole.
RE: Sprint earnings: More progress in fourth quarter, but still dropping subscribers
similarly, my father passed away in september of 2009. the
funeral happened, and eventually we cancelled his line - he
had a blackberry curve that he grew to love. i went into a
sprint store, the nice dude told me i'd have to fax the death
certificate to customer care. i did just that. weeks passed,
one month. still, i kept being charged for service on my
father's line. i called, the rep said that it'd take a couple of
weeks to process, but i should be refunded for any charges
incurred after his passing.
more time passed, a month and a half, two months, still
nothing had been taken off our bill. by this point two
months had been added to his bill. he shared a line with my
brother and upon logging into their account, there was a
shut-off notice. i was furious.
i called customer service, only to be met with someone
clueless who asked me to fax the death certificate. i told
them i HAD. the (i reiterate, clueless) guy came up with
some quick line to get me off the phone about how there's
no way to check on the status of the due credits - the
death certificate is in another department that he has no
access to. you get it when you get it basically. um, okay...
second call to sprint. i had to explain the entire situation to
someone new (not something you'd like to relive, especially
if it's your father who's passed away). again, the woman
was clueless and transfered me off to yet ANOTHER person
to whom i had to explain the ENTIRE situation YET AGAIN
to. the rep told me i'd be credited for the two months of
service billed after his death and the line cancellation fee
(can you BELIEVE they charged me this after we cancelled
his line). in my experience, credits are posted immediately
with sprint. i waited a couple of days, nothing posted.
third call i was furious. the poor recipient of my rage
transfered me to an "account specialist" who FINALLY was
able to credit me for two months of service, plus the ETF. i
was happy, but it took WEEKS and numerous calls to get it
done.
when i had sprint like 7 years ago in new york city, it was
god awful. don't get me started on its customer service.
needless to say, i left for t-mobile at the time which i had
much better experiences with.
although the service has gotten better over the years (and
to this day, it's the only provider that has flawless service in
the hollywood hills in los angeles), customer service STILL
leaves A LOT to be desired (even though i'll give this to
them, it has improved DRAMATICALLY), and their lackluster
marketing strategies need invigorating (the company isn't
good at making you think you NEED them a la at&t with the
iphone and verizon with their coverage). not to mention
their lineup of phones is anemic at best.
good luck, sprint. maybe you should've jumped on the LTE
bandwagon to stay relevant instead of going with WiMax
which seems just as doomed as CDMA.
JAM