Sprint trumpets network progress, but subscriber losses continue

Sprint trumpets network progress, but subscriber losses continue

31 JUL 2014

US operator Sprint said it reached several network improvement milestones in the quarter to 30 June, while also acknowledging that its work “impacted the network experience” – leading to the loss of customers.

“To improve customer confidence given our recent network build process, we launched the Sprint Satisfaction Guarantee, which invites customers to experience our new and improved network and enjoy the value of our Sprint Framily plans,” Dan Hesse (pictured), its CEO said.

It was also noted that the company is looking at refreshing its service plans, to take on aggressive rivals such as T-Mobile US, which has also led to AT&T and Verizon Wireless updating their propositions.

Hesse confirmed on the company’s second-quarter earnings conference call that the carrier is trialing new rates plans in certain markets to determine if it should introduce more competitive pricing nationwide.

Meanwhile Sprint’s Virgin Mobile arm yesterday unveiled a no-contract customisable plan starting at $6.98 per month, with customers then able to add options such as unlimited texting or voice, or data allowances tied to specific apps such as Facebook or Pandora.

According to the executive, the first quarter saw Sprint “largely completing” a multi-year project to upgrade its core 3G and voice network, expand its LTE coverage to approximately 254 million people, and launch HD Voice nationwide (more than 16 million customers have HD Voice-enabled devices).

Sprint Spark, which sees 800MHz, 1.9GHz and 2.5GHz spectrum combined to deliver high-speed services to consumers, is now available in 27 markets. Some 22 supporting devices are available, including flagships from Samsung and HTC.

It lost 220,000 customers in the quarter, compared with 520,000 in the same period last year, and 383,000 in the previous sequential quarter.

The operator said that contract net losses of 181,000 were “largely due to expected elevated churn levels related to service disruption associated with the company’s ongoing network overhaul”. The company actually added contract subscribers in the year-ago period.

And a loss of 542,000 prepaid customers was attributed to a recertification process at its Assurance Wireless arm, which is supported by government grants for the provision of services to eligible customers.

With losses in both the contract and prepaid subscriber bases, the losses were partially offset by the addition of 503,000 wholesale and affiliate customers during the quarter.

It ended the period with 53.3 million subscribers to its Sprint platform, flat year-on-year, and down slightly from the prior sequential quarter.

The company reported a net profit of $23 million, compared with a prior-year loss of $1.6 billion, on operating revenue of $8.79 billion, down 1 per cent. It reported an operating income of $519 million, which it said is its best in “over seven years”, compared with a prior-year operating loss of $874 million.

For the Wireless unit, service revenue was $7.09 billion, down from $7.36 billion in the prior year. It saw an operating profit of $558 million, compared with a prior-year loss of $864 million, with the earlier period including heavy severance and exit costs, as well as higher depreciation and amortisation and capital expenditure.


Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

Read more