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Sprint drops below 50m users, loses $257m

updated 08:40 am EST, Thu February 19, 2009

Sprint Q4 2008 Results

Sprint on Thursday reported continued losses in income and customers in its results for the last quarter of 2008. The cell carrier says it shifted to a $257 million loss from a $325 million profit the year before and has dropped below 50 million cellphone subscribers for the first time in years, falling from 53.8 million users in December 2007 to 49.3 million by the end of the past year. This was also down 1.3 million users from the summer.

The company attributes the declines to eliminating about $1 billion in debt as well as tough economic conditions where both business and home users are scaling back or ending cellphone service.

The effect of the losses is said mitigated by an increase in the amount of cash on hand as well as an improving customer base: more of those subscribers left have better credit, the firm says. Phones like the Samsung Instinct and HTC Touch Pro have also helped the company boost the provider's income from data plans.

Churn, or the percentage of subscriber turnover, was also positive, the company claims. Although high at 2.16 percent and up one hundredth of a percent from the summer, Sprint's churn rate was the only one of any major carrier to drop year-over-year even in the face of the economy.

While Sprint still deems its losses "unacceptably high," the company is relatively optimistic regarding its future; it expects losses to narrow over the course of 2009 as customer perception improves and it retains a more reliable amount of subscribers. The company also expects to ultimately generate cash in 2009 and won't spend more capital outside of efforts to expand its Xohm WiMAX service.

The carrier is regardless under pressure to reverse course in 2009. Much of the company's expectations for its cellphone business currently hinge on the launch of the Palm Pre, which most observers believe is the first Sprint device likely to attract customers away from the iPhone on AT&T or from the BlackBerry Storm on Verizon. Full touchscreen devices like the HTC Touch Diamond or Samsung Instinct have often only retained existing customers rather than push users to switch from competing networks.

However, Sprint isn't expected to launch the multi-touch webOS phone until late spring in unofficial estimates and isn't likely to see a turnaround related to Palm's efforts during the winter quarter, which concludes at the end of March.



By Electronista Staff
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Comments

  1. Guest

    Fresh-Faced Recruit

    Joined: Nov 1999

    0

    what happened Sprint?

    I'll never forget the insulting tone of the Sprint representative who told me "you'll be back" and that I would regret switching to an iPhone" and tried to convince me that Sprint was gaining customers not losing them.

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