Sprint Continues To Bleed Customers - InformationWeek

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Commentary
10/29/2009
11:53 AM
Eric Ogren
Eric Ogren
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Sprint Continues To Bleed Customers

Sprint reported its third quarter earnings today, and the news wasn't so good. Though Sprint lost customers at a slower pace than the previous two quarters, it still saw overall subscriber numbers drop. So much for that whole "Palm Pre to the Rescue" notion, eh?

Sprint reported its third quarter earnings today, and the news wasn't so good. Though Sprint lost customers at a slower pace than the previous two quarters, it still saw overall subscriber numbers drop. So much for that whole "Palm Pre to the Rescue" notion, eh?Sprint tries very hard in the press release about its quarterly loss to obfuscate the fact that it lost customers.

"Sprint achieved its best net retail subscriber results in more than two years and improvement in both post-paid and prepaid gross subscriber additions in the third quarter," said Dan Hesse, Sprint Nextel CEO. "Sprint is beginning to attract more customers with the industry's best device line-up and the clarity and simplicity of our offers."

Really? Attract more customers? What about the drop from 48.8 million total subscribers for the second quarter to 48.3 million total subscribers in the third quarter?

Sprint reported 33.6 million post-paid subscribers (this is the profitable kind that Sprint is losing), 5.7 million pre-paid subscribers, and 8.9 million wholesale/affiliate subscribers.

Here are the tell-tale figures, "For the quarter, net retail subscribers declined by a total of 135,000 and net wireless customers declined by approximately 545,000." That explains the drop from 48.8 million to 48.3 million total subscribers.

Sprint's subscriber base continues to shift from post-paid to pre-paid. While Sprint can still eke it out as a pre-paid provider, it is falling further and further behind AT&T and Verizon Wireless.

Perhaps what's most telling is that compelling new phones, such as the Palm Pre, have not done anything to reverse the trend. Sure, Sprint will point out that its loss rate has slowed, but that doesn't change the overall drop in subscribers at the end of the day.

What does Sprint need to do to turn things around? Why aren't solid handsets and good plans working? What it is about Sprint that's causing customers to flee?

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