Sprint Boasts 1.1 Million Quarterly Net Adds; Loss Narrows
Sprint Nextel added almost 1.2 million subscribers Q4, the first quarter it has added postpaid subscribers in more than three years. The company narrowed its loss to $929 million from $980 million a year earlier. Sprint will announce its long-term 4G strategy by midyear and may switch from WiMAX to LTE, CEO Dan Hesse indicated in a conference call Thursday.
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A “stable earnings picture” is expected this year and improvement in 2012, Chief Financial Officer Bob Brust said. Revenue is expected to be stable to slightly higher this year, he said. The carrier added 646,000 prepaid subscribers and 519,000 Sprint brand subscribers (including 58,000 postpaid customers) in Q4. It has been five years since the company added more than 1 million customers in a quarter, Hesse said. The company expects to increase its capital spending this year about 50 percent to $3 billion. “I am not declaring missions accomplished yet -- far from it,” Hesse said. “We are not even close to reaching what I think Sprint is capable of.” Sprint’s customer base was 49.9 million at the end of the period, up 3.7 percent from a year earlier.
The financial loss resulted partly from a write-off of Sprint’s investment in Clearwire, which is building a nationwide WiMAX network. Sprint is “having very good discussions with Clearwire in respect to resolving the differences between the companies,” Hesse said. Sprint declined to participate in Clearwire’s last round of financing, keeping its equity interest at 54 percent. Meanwhile, Clearwire was reported Thursday to be abandoning its retail strategy to become only a wholesale network provider. Clearwire won’t comment on the report now, but it will provide an update on its business on its earnings call Thursday, a spokeswoman said.
Sprint isn’t ready to announce its network strategy, but the company has the capability and spectrum position to launch an LTE network, Hesse said. He expects to offer additional direction on the company’s 4G roadmap later this year, he said. The outlook for improved subscriber growth for postpaid in 2011 is strong, said Bernstein Research analyst Craig Moffett. “The bigger issue is what happens in 2011 with all the new 4G phone introductions by its competitors,” said BTIG analyst Walter Piecyk.