Sprint Narrows Loss in Q3, Signs Clearwire Network Deal
Sprint Nextel reduced its net loss to $301 million in Q3 from $911 million it lost a year ago, and signed a non-binding cooperation agreement with Clearwire to work on specifications for the LTE network, CEO Dan Hesse said during a conference call Wednesday. Executives expect to sell one million iPhones in Q4 and predicted $7 billion to $8 billion in value from Sprint’s four-year contract with Apple.
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Sprint added about 1.3 million net new wireless subscribers in the quarter. It lost about 44,000 net postpaid customers, fewer than the loss of 107,000 in the year-ago quarter. The carrier added 485,000 net new prepaid customers, including net additions of 839,000 prepaid CDMA customers, offset by losses of 354,000 net prepaid iDEN customers. The carrier ended the quarter with 53 million customers. Postpaid churn was 1.91 percent vs. 1.93 percent a year earlier. Executives expected net postpaid subscriber additions for the full year. They also expected to improve total net wireless customer additions in 2011 vs. 2010.
The company is working with Clearwire on LTE standards under an agreement to ensure seamless handoffs between Sprint’s network and Clearwire’s LTE network, Hesse said. The agreement covers cell site buildouts, chipsets for devices and cell site selection, he noted. The agreement paves the way for the companies to work together to deploy LTE but doesn’t represent a final contract, he said.
Meanwhile, iPhone customers generate 20 percent higher monthly margins than those using other devices on Sprint’s network, said Chief Financial Officer Joe Euteneuer. Regarding some customers’ complaint about slow iPhone data connection on Sprint’s network, Steven Elfman, the network and wholesale chief said the company is working with Apple to optimize the device. “We are very happy with the performance. … We are getting the kind of throughput that we expected.” But due to iPhone’s higher subsidy than other smartphones, Sprint doesn’t expect the device to be profitable until 2014. Sprint started selling the device Oct. 14. Sprint shares fell 7 percent to $2.51 Wednesday.