Sprint, the nation’s third-largest cell-phone company, said its customer base shrank by more than 1 million during the first three months of 2008. Even worse, those customers who haven’t left are spending less each month. All told, the first-quarter results came in shy of analyst forecasts for both revenue and net loss, reports Business Week.
Sprint also warned that it might have to sell off some “noncore assets” or take other measures to remain in compliance with financial covenants with lenders. But that won’t mean, Hesse asserted, getting rid of the Nextel business, as suggested in recent news reports.
Nextel’s iDEN network is solely supported by Motorola. There have been reports that Sprint is considering selling it off. But Hesse, speaking to investors on Tuesday during the company’s annual shareholder meeting, said he wants iDEN to be the primary choice for Nextel customers.
Hesse said the company was resolving problems on the first call to customer service at the highest rate since the Nextel merger in 2005. He also said the integration of the Sprint and Nextel billing systems, a source of chronic pain for employees and customers, is now “materially complete” and “getting positive feedback from the front lines.”
On job cuts, Hesse said there would be further reductions, but noted that Sprint would avoid cutting jobs in customer care until the levels improve. Jobs in other area that affect the customer experience would be safe as well, he said.
Overall, he said the year would continue to be difficult as the company turns itself around.
Clearwire is planning to move onto Atlanta, Los Angeles, and Grand Rapids, Mich., with mobile WiMax deployments after it launches in Portland, Ore., in the second half of this year, the company said on its first quarter earnings call Monday evening. Clearwire ended the first quarter of 2008 with 443,000 users, up 72 percent on the previous year’s first quarter.
Clearwire CTO John Saw said the different radio characteristics and topologies of the three cities will help the company understand more about deploying mobile WiMax.
Analysts estimate it could take up to $12 billion, including backhaul costs, to fully deploy mobile WiMax in 50 U.S. markets. Clearwire says it wants to focus on the top 100 markets, filling coverage gaps with 3G. But Clearwire’s CTO says the company can deploy mobile WiMax for far less than traditional cellular deployments thanks to microwave backhaul , flat-IP architecture and IEEE standards adopted by a variety of vendors.
In related news, Sprint Nextel’s largest independent affiliate, iPCS, announced that three of its subsidiaries have filed a lawsuit against Sprint Nextel, claiming that its recently announced deal with Clearwire breaches iPCS’ exclusive arrangement with the carrier. iPCS is seeking declaratory judgment that Sprint Nextel’s arrangement with Clearwire would allow it to compete against iPCS and is therefore a breach of contract.
In other news, Virgin Mobile USA is reportedly in talks with the much smaller and troubled MVNO Helio, says Moco News. Helio is now controlled by SK Telecom, after Earthlink stopped making further investments.
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