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Sprint's losses widen ahead of Palm Pre

updated 08:25 am EDT, Mon May 4, 2009

Sprint Losses Widen

Sprint today reported a first quarter that showed the company's losses at once expanding and stabilizing. The company's net losses grew from $505 million a year ago to $594 million in early 2009, a steep 18 percent drop. It also reported continued, but softened, subscriber losses from quarter to quarter as it dropped 182,000 total users, falling to 49.1 million customers. The number was helped by a large influx of customers drawn to Sprint's $50 unlimited plan on Boost Mobile but masks a sharp drop in users in its core business, where 531,000 CDMA users and 719,000 iDEN push-to-talk users left the service.

The company nonetheless points to lower churn, or turnover, and partly blames the subscriber losses on businesses scaling back or cutting off service due to the tough US economy. It also says improvements in customer support have cut down the number of call centers it needs, and has taken advantage of the surge in smartphones to boost its average data revenue per person slightly, up from $17.50 to $18. Very few of the customers signing up for Boost Mobile were 'cannibalized' from regular Sprint service, the company adds.

It also generated much more cash flow, spiking from $178 million in early 2008 to $796 million today.

Sprint's performance in the future is expected to hinge greatly on the launch of the Palm Pre, which most now believe is due on June 7th. The smartphone is considered crucial to preventing subscribers from leaving Sprint to buy devices like the iPhone and may be Sprint's first true "halo" phone likely to get customers to switch from other carriers. The Samsung Instinct was originally pitched as this device but, without significant hardware upgrades or a true smartphone platform, has had little success.

The company hopes to get "traction" through the rest of 2009 that reverses losses, particlarly with the Pre's appearance.

by MacNN Staff



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