Wednesday, August 8, 2007

Sprint's Downward Spiral Continues

Maybe Sprint (S) will recognize soon that those "pain in the ass" people who keep calling them are called customers and the more of them they have, the better their financial performance will be?

Let do the basics first, Sprint Nextel reported its net income nose-dived 95% as its balance sheet was banged up by costs associated with the launch of its WiMax network. For the quarter ended June 30, it said it earned $19 million, or 1 cent per share, versus $370 million, or 10 cents per share, for a similar period a year ago. In the quarter, Sprint added nearly 400,000 subscribers and ended the period with a total subscriber base of 54 million, a 5% increase from a year ago. You know it has been really bad when shown these numbers Stanford Group Co.'s Michael Nelson said "At least they managed to retain customers."

But, Sprint's monthly subscriber growth trailed the performance at AT&T (T) and Verizon (VZE). AT&T added more than 900,000 customers who committed to monthly contracts, while Verizon added 1.5 million.

In short, when the best you can say is "at least we did not lose any more customers", that does not bode well for shareholders down the road. Sprint is falling farther behind what is rapidly becoming a two horse race with Verizon and AT&T slugging it out for the crown. The shame of it really is that Sprint's problem and current it's state are totally of their own doing.

I really loved being a Nextel customer, they were different, Sprint, not so much.


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