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Sprint Continues To Lose Subscribers

The third-largest carrier blames the economy for the heavy loss of business customers, but the upcoming Palm Pre could help it attract new subscribers.
Sprint Nextel posted a $594 million loss in the first quarter as it continues to bleed subscribers.

The third-largest U.S. carrier has seen some success with its prepaid arm, Boost Mobile, but overall it posted a net loss of 182,000 wireless customers for the first quarter. The company said the economy was a big factor because many of its losses were business customers who were heavy users of Sprint's push-to-talk handsets.

The company said the rate at which subscribers cancel service, or churn rate, was 2.25%, which is up from 2.16% in the fourth quarter. Although it still has more than 49 million subscribers, the continued loss of customers is a troubling sign because rivals AT&T, Verizon Wireless, and T-Mobile have consistently gained new customers over the last year.

Sprint is hoping that the upcoming release of the Palm Pre will help it retain existing customers as well as attract new users looking for a high-end smartphone. With a large touch screen, slide-out keyboard, and an Internet-friendly webOS operating system, the Pre potentially gives Sprint a legitimate competitor to AT&T's Apple iPhone 3G.

"We achieved the largest sequential improvement in overall gross adds and net adds in Sprint Nextel history, reduced churn versus the prior year, and we generated more than enough cash in this quarter to pay all of our 2008 debt maturities," Sprint CEO Dan Hesse said in a statement.

Hesse said he expects to see strong growth from Sprint's WiMax networks, as the Clearwire venture is expected to expand to at least 10 markets by the end of the year. Sprint also said it sees an opportunity for wholesale wireless data to non-Sprint devices like the Amazon Kindle.


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