Sprint Nextel subscribers flee; earnings fall
| New York
Subscriber trends are turning south again for聽Sprint聽Nextel聽as it struggles to compete with Verizon Wireless, the juggernaut of the industry.
The country's No. 3 wireless carrier on Thursday said it lost overall subscribers for the first time in two and a half years in the third quarter, as customers gave up on the moribund聽Nextel聽network and the company failed to sign up enough of them on the聽Sprintnetwork.
It's the first time聽Sprint聽Nextel聽Corp.'s is reporting quarterly results since agreeing to sell 70 percent of itself to Japanese cellphone company Softbank Corp. for $20.1 billion. The deal hasn't closed yet, but聽Sprint聽has already borrowed money from Softbank.
Sprint聽lost an overall 423,000 subscribers in the July to September period, as trends across its product lineup were weak.
Excluding recaptured聽Nextel聽customers, it lost contract-signing subscribers from the聽Sprint聽network for the first time in years. Customers on contract-based plans are the most lucrative, and keeping them has been a linchpin of CEO Dan Hesse's turnaround plan.
For non-contract plans, the Overland Park, Kan., company added just 19,000 customers, the smallest number in more than three years.
Sprint's聽report follows a blow-out performance by Verizon Wireless, the country's largest carrier, which added 1.8 million overall subscribers, and a more lackluster report from No. 2 AT&T Inc., which added 228,000 (both figures exclude devices connected through wholesale agreements).
All three carriers started selling the iPhone 5 in the quarter, but while the bigger two saw a jump in iPhone activations,聽Sprint聽did not. It activated 1.5 million iPhones in the quarter, flat with previous quarters.
Sprint聽bought the聽Nextel聽network in 2005, and it's been a major reason for聽Sprint's聽consistent quarterly losses for the last five years.聽Nextel聽phones are known for their push-to-talk capability, but the network doesn't support the kind of data rates that smartphones require, and it's not compatible with the聽Sprint聽network.聽Sprint聽is shutting it down next year.
Sprint's聽loss was $767 million, or 26 cents per share, for the July-September quarter, from a loss of $301 million, or 10 cents per share, a year ago.
Revenue rose 5 percent to $8.76 billion.
Analysts polled by FactSet expected a loss of 43 cents per share on $8.81 billion in revenue for the Overland Park, Kan., company.
Sprint聽shares rose 4 cents to $5.66 in premarket trading.
