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Sprint’s Q3 Net Loss Up

Overland Park,
Ka. – Sprint lost fewer wireless
subscribers in the third quarter compared to the previous two quarters, but net
loss grew year-over-year in the third quarter.

The company’s third-quarter net loss grew 47 percent to $478
million from the year-ago quarter and grew 24 percent sequentially from the
second quarter’s $384 million loss. The company’s nine-month net loss widened 24
percent to $1.46 billion.

Combined wireless and wireline revenues fell 9 percent in the
quarter to $8.04 billion and 10 percent for the nine-month period to $24.4
million. Wireless accounted for 86 percent of net revenues in both periods.

The company’s wireless customer base continued to shrink in the
third quarter, falling by 545,000 to 48.3 million, but Sprint said subscriber
losses were down 20 percent sequentially from the second quarter, and the
second-quarter’s subscriber losses were down 20 percent sequentially from the
first quarter.

Wireless revenues fell 8 percent in the quarter to $6.9 billion
from the year-ago period, 2 percent sequentially, and 10 percent for the
nine-month period to $21 billion, not only reflecting subscriber losses but
likely also reflecting more price-aggressive rate plans.

Sprint’s earnings also took a hit from handset subsidies that
grew almost 36 percent to support a broader selection of phones with “higher
functionality” and to acquire more prepaid handsets to keep up with demand for
the Boost Monthly Unlimited prepaid plan, the company said.

Handset subsidies soared to $950 million in the quarter from the
year-ago $700 million and the second quarter’s $850 million. Third-quarter
handset purchases came to $1.48 billion, and revenues from the handsets’ sales
came to about $530 million, resulting in the approximate $950 million subsidy

The 545,000 loss in subscribers included net losses of 271,000
CDMA-network and 530,000 iDEN-network postpaid subscribers, 135,000 prepaid
CDMA subscribers, and 410,000 wholesale (MVNO) and affiliate subscribers. Those
losses were only partially offset by a net 801,000 gain in prepaid iDEN
subscribers attracted to new sharply priced iDEN prepaid plans.

Post-paid churn of 2.17 percent for the quarter was up slightly
from 2.15 percent in the year-ago period and 2.05 percent in the second
quarter. Prepaid churn was up to 6.55 percent from the second-quarter’s 6.38
percent but down from the year-ago 8.16 percent.

Wireline net operating revenues revenue were down 1.2 percent to
$1.41 billion compared to wireless revenues of $6.93 billion.