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Sprint Wireless Posts Operating Income Despite Falling Subs, Revenue

Overland Park, Kan. — Sprint lost 467,000 wireless subscribers in the quarter ending March 31 and posted a 2 percent decline in wireless revenues compared with the year ago, but the company nonetheless reversed its previous-quarter wireless operating loss to post operating income.

The wireless subscriber losses included a decline of 333,000 postpaid subscribers, including subscribers acquired from U.S. Cellular and Clearwire, compared with a 69,000 loss in the previous quarter and a year-ago loss of 560,000.

Churn rose to 2.11 percent from the previous quarter’s 2.07 percent and the year-ago 1.84 percent disruptions caused by the carrier’s network-modernization program, the company said, but the bulk of the upgrade program will be completed midyear to produce lower churn in the second half and return the company to postpaid subscriber growth in the half, said CEO Dan Hesse.

Total retail postpaid churn rose to 2.18 percent from the previous quarter’s 2.15 percent and a year-ago 2.09 percent. Total retail prepaid churn rose to 4.35 percent from the prior quarter’s 3.22 percent and a year-ago 3.26 percent.

Separately, the company said more than 3 million subscribers have signed up for the company’s new Framily plan, marking faster growth than any other new rate plan launched by the company, even though it was available only through Sprint-branded stores during the quarter. Framily will gain more subscribers as the plan rolls out to other distribution channels, the company said.

Sprint’s wireless operating income hit $490 million compared with the prior quarter’s operating loss of $597 million and a year-ago operating income of only $2 million.

The company posted wireless net operating losses in its six previous fiscal years, which ended at the end of each calendar year.

Wireless operating revenues fell 2 percent to $8.3 billion compared with the year-ago quarter.

Total subscriber losses of 467,000 compared with a net gain of 477,000 in the previous quarter and year-ago loss of 415,000.

Total retail prepaid net losses came to 333,000 compared with the previous quarter’s loss of 69,000 and a year-ago loss of 560,000. Total retail prepaid net losses were 415,000 compared with a previous-quarter gain of 219,000 and a year-ago gain of 369,000. The company did post gains in net new wholesale and affiliate subscribers of 281,000 following a previous-quarter gain of 327,000 and a year-ago net loss of 224,000.Wholesale subs were up mainly because of growth in connected vehicles.

Sprint’s total wireless subscriber base fell in the quarter to 54.9 million from the previous quarter’s 55.4 million and the year-ago 55.2 million.

Total retail postpaid subscribers fell to 30.5 million from the previous quarter’s 30.8 million and the year-ago’s 31.3 million.

The latest quarter marks a transition period because the company changed its fiscal year to end March 31 instead of the end of December.