{"id":302481,"date":"2010-02-10T11:07:23","date_gmt":"2010-02-10T16:07:23","guid":{"rendered":"tag:contentnext.com,2010-02-10:article\/419-sprint-nextel-posts-1-billion-loss-sharpens-focus-on-prepaid"},"modified":"2010-02-10T11:07:23","modified_gmt":"2010-02-10T16:07:23","slug":"sprint-nextel-posts-1-billion-loss-sharpens-focus-on-prepaid","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/302481","title":{"rendered":"Sprint Nextel Posts $1 Billion Loss, Sharpens Focus On Prepaid"},"content":{"rendered":"

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The number-three wireless carrier Sprint (NYSE: S<\/a>) Nextel today reported a loss of nearly $1 billion on revenues of $7.87 billion, as it continued to lose customers, albeit at a slower pace than in previous quarters.<\/p>\n

Postpaid customers continued their exodus to Sprint’s competitors, with 504,000 leaving the network in the quarter alone. Sprint continued to perform well in the prepaid segment, adding 435,000 customers in that period. Still the WSJ<\/a> points out that that figure missed expectations of around 626,000 customers added—analysts had thought that Sprint’s acquisition of Virgin Mobile (NYSE: VM<\/a>) would contribute more growth to pre-paid. <\/p>\n

The company is pushing out more devices such as the Palm (NSDQ: PALM<\/a>) Pixi and Android-based devices in the hopes of retaining more customers in the year ahead. “It’s my hope and our plan that we\u2019ve turned the corner,” says CEO Dan Hesse.\n<\/p>\n

—Data holding up<\/strong>: The company says data revenues contributed more than $16.75 to overall post-paid ARPU in the fourth quarter, with CDMA data ARPU coming in at greater than $19.50; that now represents more than 35% of the company’s total CDMA ARPU. ARPU overall was down though to $55 from $56 a year ago, due to “lower casual text and data usage and lower overage revenues as a result of greater popularity of fixed-rate bundle plans and seasonality.” Hesse also ruled out lowering prices for data on WiMAX: “It’s a lot cheaper to produce a gigabyte on 4G than on 3G,” but said the company doesn’t plan to pass that on in the form of lower prices – instead it will be about raising the caps on usage.<\/p>\n

—Brand overload<\/strong>? One analyst raised the issue of whether juggling too many brands and networks—these most recently include Boost and Virgin Mobile and may reportedly get MetroPCS too<\/a> – is impacting margins negatively. (Margins are currently around 18 percent.) Dan Schulman, the president of Sprint’s prepaid business and former head of Virgin Mobile USA: “The reason we\u2019re launching a multiplicity of brands [in prepay] is that unique segments have different needs. It\u2019s not all about pricing…You\u2019re using sophisticated marketing, not just pulling price levers.” He says there are between 55 million and 60 million prepay users in the U.S.<\/p>\n

—On the Nextel iDEN network<\/strong>: Hesse says it is “performing at its best levels ever…We will offer Boost on both iDEN and CDMA to give customers more choice.”<\/p>\n

—On Clearwire (NSDQ: CLWR<\/a>) investments<\/strong>: Hesse did not rule out putting more investment into Clearwire: “We just put a lot of equity in and raised some additional debt…The board of Clearwire will determine if additional funding is needed.” He says he would like to expand its coverage—it currently reaches 120 million people—“but it takes a while to build out a 4G network.”\n<\/p>\n

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