Sprint Nextel Posts Loss, But Record Wireless Revenue

Overland Park, Kan. — Sprint said Sprint Nextel had a deeper loss in the fiscal second quarter but reported record quarterly Sprint platform wireless service revenue of $7.2 billion and continued growth in Sprint platform postpaid subscribers.
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Overland Park, Kan. — Sprint said Sprint Nextel had a deeper loss in the fiscal second quarter but reported record quarterly Sprint platform wireless service revenue of $7.2 billion and continued growth in Sprint platform postpaid subscribers.

Net operating revenues for the quarter were $8.87 billion, up from the prior year’s $8.84 billion, and its operating loss was $874 million, up from $629 million. The net loss was $1.59 billion, up from the prior year’s $1.37 billion.

However Dan Hesse, Sprint CEO, said, “This is a historic time for Sprint. We recently shut down the Nextel platform and completed the Clearwire, SoftBank and U.S. Cellular transactions. In the second quarter, we achieved record levels in Sprint platform postpaid subscribers, service revenue and postpaid ARPU, and increased our 4G LTE footprint.”

Hesse continued, “Sprint pioneered unlimited voice, text and data in 2008, and we recently introduced the first lifetime guarantee, solidifying our commitment to the simplicity and peace of mind that unlimited brings.”

Sprint platform service revenue, postpaid ARPU and postpaid subscribers all reached best-ever levels in the second quarter. The Sprint platform had postpaid net additions for the 13th consecutive quarter and a postpaid Nextel recapture rate of 34 percent. Sprint platform postpaid ARPU grew year over year for the 11th consecutive quarter.

As expected, the Sprint platform lost prepaid customers as a result of planned deactivations related to regulatory changes impacting the lower-ARPU Assurance brand. This was partially offset by strong Assurance gross additions and continued growth in both Virgin Mobile and Boost Mobile subscribers. Virgin Mobile gross additions improved 70 percent year over year.

Sprint made strong progress on the Network Vision deployment in the quarter, including the shutdown of the Nextel platform on June 30, which enables significant future improvement to Sprint’s cost structure. More than 4 million Nextel subscribers were recaptured to the Sprint platform since Network Vision commenced in early 2011.

As part of Network Vision, Sprint has launched 4G LTE in 151 cities, including Los Angeles, Dallas, Atlanta, Miami and Boston. Sprint expects to provide 200 million people with LTE by the end of 2013.

Eighty-six percent of quarterly Sprint platform postpaid handset sales were smartphones, including approximately 1.4 million iPhones sold during the quarter. Forty-one percent of iPhone sales were to new customers.

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