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Sprint Losing Fewer Subs

Overland Park, Kan. – Sprint lost fewer wireless subscribers in the fourth
quarter and fiscal year ending Dec. 31 and reduced its year-over-year wireless
operating losses for the periods, the company announced.

The company, however, didn’t predict when it would return to
wireless profitability, nor did it offer a 2010 target for subscriber growth or
churn reduction. In 2010, however, the company “expects continued significant
improvement in the downward trend in revenue … seen in the past few years,” said
CFO Robert Brust during an investor conference call.

One of the methods to achieve that goal will be a new prepaid
strategy that, by the end of the second quarter, will provide “a robust revamped
portfolio of brands,” each targeting different segments of the population with
“unique value propositions,” said Dan Schulman, prepaid group president. Each
brand will appeal to people with unique needs and to people who shop in
different channels, he said. By segmenting the prepaid market, Sprint will be
able to compete “without pulling the price lever” in each segment, he continued.
Growing prepaid price competition slowed the company’s growth in net prepaid
subscriber additions in the fourth quarter compared to the first three quarters,
the company noted.

Sprint’s new prepaid strategy will be “fully rolled out by the
end of the second quarter,” Schulman said. The U.S. prepaid market has grown to
about 55 million to 60 million subscribers industrywide, thus supporting a
segmentation strategy, he said. In prepaid, Sprint’s current brands include
Boost Mobile and Virgin Mobile, which it acquired last year.

In other comments, CEO Dan Hesse noted that 49 percent of
Sprint CDMA handsets sold in the fourth quarter were either smartphones or
touchscreen phones. The models included the company’s first Android-based

Despite growing postpaid price competition from Verizon
Wireless and AT&T, Hesse also said, Sprint’s plans still offer the best
value. “Our job is to better educate the consumer” about the value of Sprint
plans, he said.

Hesse also said the carrier has made a lot of progress in
upgrading existing customers’ perceptions about the Sprint brand, but he noted
that it has made fewer strides changing the perceptions of

He also said he wished the carrier made more progress in
reducing churn in 2009 and plans to do better in 2010, but he didn’t offer a
churn target. The company, nonetheless, lost fewer net subscribers in the
quarter and full year on a year-over-year basis.

For the quarter, the company lost 148,000 net subscribers
compared to a third-quarter 545,000 reduction and year-ago 1.27 million
reduction. For the full year, Sprint lost 1.13 million subscribers compared to a
year-ago loss of 4.58 million subscribers. The company’s year-end subscriber
base came to 48.1 million, down from a year-ago 49.3 million.

Wireless posted a fourth-quarter operating loss of $635
million, up sequentially from the third quarter’s $448 million loss but down
significantly from a year-ago fourth-quarter loss of $1.82 billion. The
full-year operating loss fell to $1.96 billion compared to the previous year’s
$2.81 billion operating loss.