“Sprint Nextel Corp., the nation’s third-largest wireless carrier, reported a $1.6 billion fourth-quarter loss Thursday as it wrote off the remaining value of its 2005 purchase of Nextel Communications Inc. and continued to lose subscribers and revenue,” David Twiddy reports for The Associated Press.
“Revenue fell 14 percent to $8.4 billion from $9.8 billion. Analysts expected $8.55 billion,” Twiddy reports.
“Much of the decline came from a smaller number of subscribers. The company said it lost 1.3 million customers during the quarter, including 1.1 million “postpaid” customers who pay a monthly bill and are considered the most valuable,” Twiddy reports. “The subscriber losses took Sprint below the 50 million mark to 49.3 million, an 8.4 percent decline from the end of 2007. Churn, or the measure of subscriber turnover, was 2.16 percent, down from 2.29 percent a year ago but up from 2.15 percent in the third quarter.”
Twiddy reports, “By comparison, AT&T Inc. gained 2.1 million wireless customers to 77 million during the quarter while Verizon Wireless added 1.4 million to end the year with 80 million.”
MacDailyNews Note: On January 9, 2009, Verizon Wireless acquired Alltel Wireless in a deal valued at $28.1 billion. The acquisition expanded Verizon’s wireless network to cover approximately 290 million people, increased the company’s customers by 12.9 million and established Verizon as the largest United States wireless carrier. Approximately 2.1 million of those total customers are in markets that will be divested by Verizon Wireless in the coming months, as required by the Department of Justice (DOJ) and the Federal Communications Commission (FCC) as a condition of the merger approval. Alltel will remain a wholly owned subsidiary until mid 2009. In contrast, AT&T gained 2.1 million wireless customers – with Apple iPhone’s help, of course – without having to buy other companies and their customers.
Twiddy continues, “Sprint has struggled since purchasing Nextel as operational and technical problems have forced it to fall far behind rivals AT&T and Verizon Wireless in signing up new customers… In the past year, the company has focused on improving customer service — one of its biggest shortcomings — which executives say will slow the exodus of customers. It also has announced an exclusivity deal to soon sell Palm Inc.’s new Pre smartphone, which early reviewers say could be the first serious competitor to Apple Inc.’s iPhone, sold through AT&T.”
MacDailyNews Take: Good luck with that, Sprint and Palm. Just as two wrongs do not make a right, two losers do not make a winner.
Twiddy continues, “The company is also focused on cost-cutting and announced last month it would slash 8,000 jobs in a bid to save $1.2 billion annually. Several analysts have also predicted the company will soon announce a deal to outsource thousands more.”
Full article here.
MacDailyNews Take: The bloodbath continues unabated.
