Sprint in big, big trouble
Rating: choking on Nextel
By Annie Turner
Just when we were applauding Sprint’s decision to allow any device on its forthcoming WiMax network – a radical step for a US operator – disaster strikes.
Everyone knew Sprint Nextel was struggling, but it turns out it’s in more trouble than we thought and its WiMax roll-out is likely to slide right down the agenda as it slashes capex in a desperate attempt to improve cash flow. The company is without a CEO – Gary Forsee was forced to walk the plank last month – and third-quarter net profits fell 77% to USD 64m and operating revenues fell 4.2% to USD 10bn.
Sprint lost 337,000 monthly contract customers in the third quarter, a record since it bought Nextel two years ago. It ended the period with almost 54m subscribers overall, compared with 51.9m a year earlier. The operator has also withdrawn its financial predictions for next year.
Many of its problems lie in having bitten off more than it could chew when it bought Nextel. It has been a mammoth task trying to integrate the two companies’ assets and two years down the line, there is clearly still a very long way to go.
Never mind about its vaunted Mobile Media Network, Sprint needs to concentrate on getting basics right, like not dropping calls and acceptable customer service – and fast.
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