Sprint Posts $326 Million Loss - InformationWeek
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11/7/2008
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Sprint Posts $326 Million Loss

The third-largest wireless carrier saw 1.3 million subscribers defect while it continues to struggle to fully integrate the iDEN network it acquired with the 2004 acquisition of Nextel.

Sprint Nextel took a large hit in the third quarter, as the third-largest U.S. wireless carrier reported an operating loss of $326 million.

The company had revenue of $8.8 billion, down 12% from the $10 billion it earned for the same period last year. Overall, Sprint has reported more than $1.1 billion in net losses for the year.

Part of the problem is that Sprint has a tough time retaining subscribers, as 1.3 million customers left in the third quarter. Since the third quarter of last year, the carrier has shed 3.5 million customers, giving it 50.5 million wireless subscribers.

Another issue is that Sprint was commonly seen as having poor customer service, an issue that CEO Dan Hesse realizes is an important problem. The company has implemented a 30-day return policy and an in-store cell phone setup program, and it recently changed its early-termination fee policy to address this.

The mobile operator continues to struggle to fully integrate the iDEN network it acquired with the 2004 acquisition of Nextel. The company reportedly explored selling the Nextel unit this year, but Hesse said those plans are off the table and the company will "rejuvenate" the technology.

"During tough economic times, we tightly managed our business to generate and retain cash and maintain substantial liquidity while continuing to reduce debt. At the same time, we made advancements in improving operations and delivering on the promise of the Now Network," Hesse said in a statement. "Customer care metrics have improved steadily throughout the year, and external surveys are confirming we're providing a better customer experience."

Sprint also has a lot riding on the WiMax venture that has already launched in Baltimore. The 4G network will face competition in the future from other telecoms with the Long Term Evolution technology, but Sprint said it will be successful because of the embedded-chip model and current availability.

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