Sprint Posts Third Quarter Revenue Decline, But Is Ready for a Turnaround
At a Glance
Sprint’s revenue dropped to $8.68 billion from $8.76 billion. It recorded a quarterly net income of $383 million in comparison to a loss of $767 million in the year ago quarter. The third largest U.S. wireless provider experienced a net customer loss of 360,000 during the quarter. Chief Executive Dan Hesse said the ill effect of the iDEN network shutdown wouldn’t hurt the carrier as much in the last quarter of the fiscal. Sprint tried to recapture customers by offering lifetime unlimited plans, but this was not of much help.
Sprint is concentrating on increasing its network speed and expanding its capacity using the spectrum it acquired through Clearwire’s acquisition. It proposes to spend around $16 billion over a span of two years for network upgrading for LTE coverage expansion. The company said that it plans to combine Clearwire spectrum by the end of next year, covering a population of about 100 million people.
The company is launching Sprint Spark, a service that would provide faster download speed in around 100 cities over a span of three years. While Sprint is putting in effort to strengthen its LTE, how are the other rivals doing?
Other Wireless Players
In contrast to Sprint, largest rival Verizon (NYSE:VZ) added 927,000 subscribers and AT&T (NYSE:T) added around 363,000 customers on its network. T-Mobile (NYSE:TMUS) is scheduled to come out with results on Nov. 5. The smallest national carrier is making aggressive moves and introducing simple inexpensive plans to fight its counterparts, AT&T in particular.
T-Mobile is offering cheaper no-contract plans to attract customers from rival networks. But Sprint isn’t sitting quite. In response, the telecom operator came with the Sprint One Up plan that allows subscribers to upgrade their handsets twice a year by paying an additional $10 per month.
The Bottom Line
Though revenue fell during the quarter, investors did not look worried. They are aware that it would take some time for the recently rejuvenated Kansas carrier to come to form and tighten its competition with other national rivals Verizon, AT&T and T-Mobile. Sprint has suffered for years after the acquisition of the Nextel network which was incompatible with the carrier’s.
This is a transition phase for the company and would take the telecom operator to recover from the fall and effectively challenge the Big Red, the Dallas player and the revitalized T-Mobile. It's been just few months that Sprint sold 80% of its stake to Softbank, and then acquired the spectrum king Clearwire. Once Sprint is ready with its LTE network, it would be a tough contender to all other mobile operators. It would give much more capacity to its customers compared to any of its competitors and that too at cheaper rates since it has a huge mass of spectrum, thanks to Clearwire.
It would be exciting to watch how things turn around for Sprint and it increases wireless competition for the two big industry players.