Add to del.icio.us     Digg this

Nov. 9, 2008

Sprint Nextel says it lost $326 million in its third quarter, saw its revenue fall to $8.8 billion and lost 1.3 million wireless customers.

The net loss is slightly lower than in the second quarter, when Sprint actually lost $344 million, but the current revenue is down from $9.1 billion.

In 2007, and for the comparable quarter, Sprint turned a $64 million profit on $10 billion of revenue.

CEO Dan Hesse underscored the positive. “During tough economic times, we tightly managed our business to generate and retain cash and maintain substantial liquidity while continuing to reduce debt. Meanwhile, we made advancements in improving operations and delivering on the promise of the Now Network."

"Customer care metrics have improved steadily throughout the year and external surveys are confirming we’re providing a better customer experience,” Hesse said.

To help fix the company, Sprint is considering new ways to position the former Nextel push-to-talk service, introducing new devices, partnering with technology industry giants for its WiMAX network and trying to improve its reputation for poor customer service.

Sprint also recently released a software upgrade for its flagship Instinct smartphone.

Sprint added that it amended the terms of its credit agreement that began in late 2005. The wireless carrier now has $4.5 billion in revolving credit, compared to $6 billion originally. Also, Sprint paid $1 billion of its loans, officials said.

Analyst Kate Price, of Technology Business Research, said Hesse’s turnaround efforts are slowly beginning to work, but it could take years to complete.

“Sprint’s customer satisfaction and churn reduction efforts are showing signs of success. The sequential increase of 15 basis points in postpaid churn, which totaled 2.15 percent in the third quarter was largely expected due to seasonality, though Price notes the increase in churn was half that of historic third quarters, pointing to improvement. The company did reduce postpaid churn 15 basis points year-to-year, which demonstrates that Sprint is making some progress in churn reduction over time,” Price wrote in a report.

She added “however, TBR believes Sprint will continue to lose revenue at a rapid pace in upcoming quarters as the company attempts to control subscriber losses.”

Add to del.icio.us     Digg this

    This article was featured on Business 5.0 and on Tech Blog.

Source: Sprint Nextel.