Monday, October 30, 2006
Sprint Profit Plunges as Customers Flee
Sprint , struggling to digest its $35 billion purchase last year of Nextel, reported worsening results for the third quarter.
Sprint said net income fell to $247 million, or 8 cents a share, from $516 million, or 23 cents a share, in the 2005 period. Operating income was off by 6%. Revenue rose 8% to $10.5 billion. The results met expectations.
But worrisome was that at a time when Cingular and Verizon are routinely adding more than 1 million customers a quarter, Sprint managed to lose customers, notes Roger Entner, a wireless analyst at Ovum. "It's pretty bad."
Sprint lost 188,000 "post-paid," or contract, customers, historically Nextel's strongest and most lucrative growth engine.
On the plus side, Sprint added 216,000 customers for Boost, Nextel's cheaper consumer product. An additional 205,000 customers came from wholesale and affiliate sales. Total net gain: about 233,000.
Churn, which refers to how many people dump the service each month, was 2.4%. Cingular is in the 1.5% range.
Source: Mobile Tech Today