Sprint earnings: More progress in fourth quarter, but still dropping subscribers

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

Topics: Enterprise Software, Banking, Mobility, Telcos, Wi-Fi

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  • Soon to be defecting...

    I've been with Sprint for over 10 years but am considering jumping ship. My contract is up for renewal and it's such a hassle, it would be easier to go with another carrier and start fresh at this point! I can't get into my account, the guy is insisting I buy an ugly phone, I have to call yet another number....... No wonder people are running the other way. How about better CUSTOMER SERVICE!
    • Sticking with Sprint

      The bottom line is that Sprint does cost less than the other carriers and it does not stick you at every turn! I've had almost every carrier in the past and I think that Sprint is positioned almost perfectly in the middle ground.

      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

        Except that I have done the math and Sprint for me is the least costly by a good margin. I have an everything data plan with 1500 minutes plus two other lines besides my own (wife and son) and I just can't beat the price. Plus, I love and use the INCLUDED Sprint Navigation, as well as no worries in web surfing or messaging. Customer service has always done me right too.
    • Update

      So, finally got access to my account and began looking at phones and plans. VERY limited number of free phones and none that we wanted. We picked 2 phones for a total of $179 with a $50 rebate on each. (Note: last rebate took months to get back!) We added data services to our plan which brought it to $99.99/month plus taxes, fees, surcharges and your right pinky finger.

      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...

        We get that you don't like Sprint, and that is your choice and your right. But to tell us you get the same services on AT&T for the same price as Sprint, well, that's just a bit much to swallow. AT&T is the most expensive of the Big 4, and you pay additional for features that are included in Sprint. And I don't dislike AT&T by the way (Verizon I do though). I am a U-verse customer and absolutely love it. I just call it like I see it.
        • Update 2

          It's not that I don't like Sprint, I'm just fed up with the runaround. The time spent on getting new phones and making one change to our plan is just ridiculous. It took less time to buy a car.

          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!

            There's an old song sang on a program called HeeHaw that said "if it weren't for back luck, I'd have no luck at all". Man, sure sounds like you're fitting that category. :-) Since you mention area differences, I wonder if the area a person is from makes a difference in the customer service they obtain. Do we all call in to the same call center, or could they be regional and thus the varied reports of CS experiences? Anyway, glad to hear you got things worked out to your satisfaction finally. Still, when you say the $99 plan for Sprint versus AT&T, Sprint's includes data and messaging, but I'm pretty sure AT&T's does not. That's what I mean by Sprint being cheaper. I use those extra services more than I use voice services, so to use any other carrier I'd have to pay more for what I get and use most. Bottom line, I'm glad Sprint is around and I'm glad we have 3 other main choices. The competition makes the carriers try harder and be more competitive, and that always benefits us consumers. We need a break after all!
  • RE: Sprint earnings: More progress in fourth quarter, but still dropping subscribers

    This is no surprise to those of us who swam for shore long ago. My attorney advised me to "just pay them" it would be cheaper than my fee. My reply was "I guess I should just give money to anyone who demands it" In all my years of being a consumer this company had to be the worst experience of my life. The company contacts laughed at me over the phone, called me a liar, and disregarded their own written contracts. I spent 3 times the amount they wanted fighting them; but now I get to sit back and watch them drown. Hesse should clean out the entire service department and start from scratch, this would be the only way to be certain he cleanses the company of the disease.
  • My experience - not even being a subscriber

    My stepfather passed away several years ago and I tried to get them to cancel the service and stop sending bills. I tried several times but the bills just kept coming. When I talked to customer service several months later, even they acknowledged that there was absolutely no activity for the past several months (that corresponded to the date he died). I even sent a copy of the death certificate, but the bills just kept coming. One representative didn't seem to think the death certificate was enough proof - so I said, "do you want me to dig up the body and send it to you?" After that conversation, the bills mysteriously stopped.

    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...

      ...by a huge degree over the last few years. As unfortunate as your experience was, there are similar stories across all the cell companies, and utilities for that matter.

      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.
      Chris Z
      • Not according to the poster below

        It is possible that Sprint has gotten better, but trying to convince their former subscribers that 'jumped ship' to 'swim' back is a tall order. Winning back customers that you have abused is really tough, especially if they are satisfied with their current service. I have sworn off companies that screwed me in the past and the chances of getting me back as a customer are 0%.

        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

    omg! your story has totally struck a chord with me.

    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

    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.