Sprint Nextel today reported fourth quarter and full-year 2008 financial results. The numbers weren’t good, but Sprint says they’re on the road to recovery.
The company reported quarterly revenues of $8.4 billion, a decline of about 14 percent over the previous quarter. For the fourth quarter, Sprint lost $1.62 billion, or 57 cents a share. It’s better than the $29.45 billion, or a whopping $10.36 a share, it lost during the fourth quarter of 2007 (due to its Nextel writeoff), explains C/Net.
Full-year 2008 revenues were $35.6 billion. The company generated $536 million of Free Cash Flow* in the quarter, and $1.8 billion for full-year 2008. During the quarter, the company repaid approximately $1 billion in principal of debt and received $213 million in proceeds at the closing of the Clearwire transaction.
As of Dec. 31, 2008, the company had $3.7 billion of cash and cash equivalents and $1.4 billion of borrowing capacity available under its revolving bank credit facility, for a total liquidity of $5.1 billion.
For their Wireless business:
- The company served 49.3 million customers at the end of 2008, compared to 53.8 million at the end of 2007.
- For the quarter, total wireless customers declined by a net 1.3 million, including losses of 1.1 million post-paid customers and 314,000 prepaid users, which was slightly offset by a 146,000 increase in the number of wholesale and affiliate subscribers.
- At the end of the fourth quarter, the company served 36.7 million post-paid subscribers, 3.6 million prepaid subscribers and 9.0 million wholesale and affiliate subscribers.
- Subscribers by network platform include 35.5 million on CDMA, 12.4 million on iDEN and 1.4 million Power Source users who utilize both networks.
- Almost 10% of post-paid customers upgraded their handsets during the fourth quarter, resulting in increased contract renewals.
- Wireless post-paid churn was 2.16% compared to 2.15% in the third quarter and 2.29% in the year-ago period.
- Wireless service revenues for the quarter of $6.6 billion declined 13% year-over-year and 4% sequentially. The year-over-year decline and the sequential decline were due primarily to fewer wireless subscribers.
- Wireless post-paid ARPU in the quarter was stable sequentially at $56, as growth in data helped offset voice declines. Data revenues contributed more than $14.50 to overall post-paid ARPU in the fourth quarter, led by growth in CDMA data ARPU. CDMA data ARPU increased about 9% from third quarter, to more than $17.75, now representing almost 31% of total CDMA ARPU. The increase was driven by strong take rates on bundled data services, such as those included with Simply Everything™, as well as continued growth in data cards.
- Prepaid ARPU in the quarter was approximately $30 compared to $28 in the year-ago period and $31 in the third quarter of 2008. The year-over-year increase reflects a growing contribution from CDMA Boost Unlimited subscribers. The sequential decline is due to lower ARPU from traditional prepaid users.
The jury is still out whether a new handset from Palm and plans like their $99 Simply Everything Plan are enough to convince customers to leave AT&T, Verizon and T-Mobile for Sprint, notes ZDNet.
Part of Sprint’s remedy lies in its Boost Mobile unit, the prepaid phone service that runs on the Nextel iDEN network, explains The Street. Sprint, already the leader in undercutting the competition with unlimited pricing plans, promises to bolster its subscriber numbers by promoting its new Boost Mobile $50 unlimited everything offer and its $50 Motorola i290 handset, available without a contract.
Sprint’s $50 plan offers unlimited calling, texting and two-way walkie-talkie use. That’s about half the price of comparable unlimited plays by Verizon and AT&T.
Dailywireless has more on Boost Mobile: $50/mo for Unlimited Talk, Data & Walkie-Talkie and Sprint Cuts 8,000 Jobs.
