As expected, Sprint Nextel reported a continued loss of wireless subscribers and a continued decline in overall revenue for its fourth-quarter 2007. Also, as expected, Sprint announced an unlimited pricing plan for its wireless offering.
"Our business is not performing well right now," Sprint CEO Dan Hesse said during a conference call. "We are working aggressively to turn this around, but our financial performance will not improve overnight."
Sprint lost 108,000 wireless customers in the quarter. The telco’s wireless segment had 53.8 million total subscribers at the end of 2007; this compares with 53.1 million subscribers at the end of 2006.
Sprint reported net operating revenues of $9.8 billion in Q4, compared with $10.4 billion in the previous year’s fourth quarter.
The net loss for the quarter was $29.5 billion, or $10.36 diluted loss per share, compared with a net income of $261 million, or 9 cents diluted earnings per share, in the fourth quarter a year ago. Net debt at the end of the fourth quarter was $19.7 billion, compared with $19.9 billion at the end of the third quarter of 2007 and $20.1 billion at the end of 2006.
Sprint said that it would not declare dividends in the foreseeable future. The telco is borrowing $2.5 billion from a revolving credit facility in order to improve its financial situation.
In the fourth quarter, wireline revenues totaled $1.6 billion, representing a decrease of 1 percent compared with the fourth quarter of 2006. But IP revenues increased 11 percent sequentially and 42 percent on an annual basis. Full-year 2007 wireline revenues were $6.5 billion, compared with $6.6 billion in 2006.
Total wireless revenues for the fourth quarter were $8.5 billion, representing a 2 percent decrease sequentially and a 6 percent decline year-over-year. Full-year wireless revenues totaled $34.7 billion, representing a 1 percent decline compared with the full-year 2006. Sprint attributed the decline primarily to lower equipment revenue.
“The fourth-quarter financial results reflect the challenges facing our wireless business,” Hesse said. “We are making significant changes across the organization in an effort to improve execution, stabilize our customer base and deliver on the opportunity provided by our assets . . . We plan to share some of our initiatives for improving the customer experience and operations next quarter.”
In conjunction with its fourth-quarter earnings release, Sprint announced that it is launching a domestic unlimited pricing plan, giving new and existing Sprint customers unlimited voice, data, text, e-mail, Web-surfing, Sprint TV, Sprint Music, GPS navigation, Direct Connect and Group Connect for a price of $99.99 per month.
Earlier this month, USA Today reported that Hesse was considering flat-rate prices for unlimited voice calls as one way of turning the company’s fortunes around. Sprint is currently the third-largest wireless provider behind AT&T and Verizon, both of which announced unlimited voice/data plans – also offered for $99.99 per month – last week.
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