Sprint Continues To Lose Customers - InformationWeek

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Sprint Continues To Lose Customers

While Sprint has been struggling with past problems associated with the Nextel acquisition, it has recently been betting on Mobile WiMax to help bail out its future.

Subscriber defections continued at Sprint Nextel as the company struggled to regain its footing after Sprint's acquisition of Nextel. In its fourth-quarter report Thursday, Sprint said it lost 1.3 million subscribers.

The number of lost subscribers dropped Sprint's user base below 50 million, but the company still held onto its spot as the third largest cell phone service provider behind Verizon Wireless and AT&T.

The company trimmed its fourth-quarter net loss to $1.62 billion from its year-earlier loss of nearly $30 billion, which pinned the losses on its Nextel purchase. This year's quarter contained a $1 billion goodwill loss. The final loss of 1 cent a share was calculated after the exclusion of various items nonessential to the calculation of the quarterly financials.

While Sprint has been struggling with past problems associated with the Nextel acquisition, it has recently been betting on Mobile WiMax to help bail out its future. In addition, Clearwire's additional partners including Google, Intel, AOL, and Comcast have written down their Clearwire WiMax investment as it becomes clearer that LTE (Long Term Evolution) will likely be the dominant 3G and 4G wireless infrastructure.

In its latest quarter report, Sprint said it had repaid $1 billion of debt. The company said its revenue for the quarter dropped to $8.43 billion -- a decrease of 14%. Long vilified for its poor customer service, Sprint has had success in recent months in improving the service after CEO Dan Hesse placed a high priority on the issue. The company has also launched a $50 budget calling service -- Boost Mobile -- in hopes of regaining lost subscribers and attracting new ones.

One potential attraction may be the Palm Pre smartphone. Palm has partnered with Sprint to be the exclusive carrier of the Pre at its launch in the first half of 2009. While AT&T has the iPhone 3G, T-Mobile has the Android-powered G1, and Verizon Wireless has the BlackBerry Storm, Sprint will likely make the Pre its flagship handset.

Sprint has lost more than 5 million of its most valued customers -- its post-paid subscribers -- in just the last five quarters and the loss of 1.3 million post-paid customers in the latest quarter indicated Sprint's corrective actions haven't been too successful to date. However, the company said it foresees a slowing later this year of post-paid and total subscriber losses.

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