updated 04:20 pm EDT, Thu July 28, 2011
Sprint Q2 2011 defined by smaller adds, big losses
Sprint had mixed news on Thursday for its spring quarter. While it reached a deal with LightSquared for 4G, it posted a steep loss of $847 million, $87 million more than it lost a year ago. The company added 1.1 million new subscribers, though a lower than usual 275,000 of these were its core Sprint subscription customers, where the rest were either prepaid or those signing on through an affiliate carrier.
The results came in spite of Sprint having its lowest ever subscriber turnover ever, at 1.75 percent. Prepaid users, well-known for jumping ship, also saw their lowest turnover in six years, at 4.14 percent. Most of the loss, $588 million, was blamed on investment losses and a change in Michigan tax law.
The shortfalls suggest that the company's high profile Android launches mostly kept customers onboard instead of improving growth. Sprint launched the Evo 3D, the Evo View 4G tablet, and the Nexus S 4G, but the devices have yet to see the mass adoption that the Evo 4G sparked a year earlier. Sprint plans to hedge its bets for the summer and is launching the high-end Motorola Photon 4G this month.
A chance exists that the spring was Sprint's last quarter without an iPhone. Although Sprint has been publicly elusive, clues have emerged that Apple is willing to commit to the smaller of the two major CDMA carriers. Alongside rumors of a September release, Apple has been hiring a carrier engineer next to Sprint that could only be there to support the Sprint network.
An iPhone deal might not reverse losses but could help Sprint's overall performance by cutting defections to other carriers. At Verizon, the iPhone helped Verizon finally start growing faster than AT&T again and instantly became the network's most popular smartphone by a wide margin.