Sprint flags after losing 1 million subscribers

Embattled US carrier Sprint Nextel said Monday that its first quarterly loss more than doubled to $505m, compared to $211m a year ago, as the company haemorrhaged mobile subscribers.

During the quarter, a net total of 1.09 million wireless subscribers walked away from the firm, including 1.07 million post paid subscribers and 543,000 traditional prepaid users.

Quarterly revenues fell 8 per cent from $10bn in the first quarter of 2007 to $9.3bn in the 2008, as the company continued to struggle with the integration of Nextel which it bought for $35bn in 2005.

Announcing the results, Dan Hesse, Sprint Nextel CEO, said, “As expected, our Wireless business delivered weak financial results. While the business will continue to face challenges in the short term, we are making progress in methodically attacking the sources of our performance issues. In the first quarter, we implemented a new, more focused brand campaign, we executed on our plans to take costs out of the business, and we made progress on the larger organizational and strategic decisions that we believe will lead to improved profitability in the long term.”

Last week the company spun off its problematic WiMAX initiative into a joint venture with Clearwire. The deployment of a national WiMAX network will be bankrolled by Google, Comcast, Time Warner Cable and Bright House Networks.

“We have strengthened our hand with last week’s 4G announcement, which captures and leverages the value of Sprint’s sizable spectrum holdings, provides Sprint with additional financial flexibility, gives us a time-to-market advantage over our competitors in the important growth area of wireless broadband, and allows Sprint management to focus our resources and attention on improving the performance of our core business,” said Hesse.

Nevertheless, the firm has been dogged by rumours in the US press that Sprint should and may be looking to offload Nextel. There have also been reprots that Deutsche Telekom is looking at buying Sprint Nextel as a means to improve its own position in the US market as it plugs away against Verizon and AT&T.