Ouch: Sprint Hemmoraging Customers, Losses Build

By  |  Friday, November 7, 2008 at 11:33 am

sprint_logo1If there was any doubt in your mind Sprint’s in a whole world of hurt, Friday’s results announcments should lead you to conclude this company is in some serious trouble. For the quarter ending September 30, the wireless carrier lost a staggering 1.3 million customers, all but 200,000 of which were contracted customers.

Just to put that in perspective, thats about two percent of its customer base gone in three months. Since last year at this time, the company has lost about 3.5 million customers, although still remains quite large at 50 million users, of which 83 percent are post-pay.

Losses for the quarter were $324 million, a sharp downturn from the profit of $64 million a year ago. Revenue also fell from $10.1 billion to $8.8 billion. Add this to the fact that it cannot seem to get rid of its iDEN network it acquired from the Nextel acquisition (and has been a part of the company’s financial and customer retention problems), and it does not look good.

Of course, the company is blaming it on the economy. Here’s CEO Dan Hesse in a statement on the quarterly results.

During tough economic times, we tightly managed our business to generate and retain cash and maintain substantial liquidity while continuing to reduce debt. At the same time, we made advancements in improving operations and delivering on the promise of the Now Network.

Pardon me for being contrarian, but if the business was so tightly managed, would you be losing customers like this? Out of all the carriers — even the nortoriously bad “old” AT&T Wireless — Sprint holds the title for the most customers lost in a single quarter.

I also find it somewhat odd Hesse talks about reducing debt when the company is actually adding to it by swinging from a profit (however small it may be) and into the red. You can’t reduce debt while spending money you don’t have.

One positive that the company can take out of this quarter is that nearly one in ten subscribers updated their phones, resulting in new contracts. It also said that it expects stabilization within its subscriber adds this quarter.


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6 Comments For This Post

  1. Todd Says:

    Sprint has to be the worst cell company I have ever dealt with. My contract is up in December and I can’t wait to switch.

  2. Ed Oswald Says:

    If I may ask, what is so bad about them? Cellular service? Customer service?

  3. Scott Says:

    Negative publicity is Sprint’s problem! I’m a customer of Sprint’s and I am very happy with the cellular service and the customer service. Sprint’s customer service is always very helpful and solve my problems quickly. My phone was the Fusic for years, but I just recently switched to the Touch Pro. That phone rocks!

  4. Bill Says:

    I agree with Scott. Also Sprint has the best data network hands down. I owned an iPhone and I now have the Instinct. I enjoy the Instinct by Sprint more than the iPhone and I rarely have any dropped calls or poor reception. Hum?

  5. nathaniel Says:

    sprint’s customer service used to be horrible, but it has improved tremendously…

    they have the fastest of all internet service, but no iphone and the cost of replacing a phone is horrendous… i shouldn’t have to buy insurance for a phone to avoid being punished with a $200 price tag on the cheapest replacement phone.

    and a phone shouldn’t be $200 – $400 cheaper for new customers as apposed to current customers…
    surely there’s $50 throwaways?

    but sprint’s service is top shelf…
    newest technology

  6. Steve Says:

    Not to be nitpicky, but your spelling of the third word in the hed isn’t even close. “Hemorrhaging” is what you want. Fire your spellchecker!