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Sprint boasts 1.1M net adds, cuts churn in Q4

Thu, 02/10/2011 - 7:15am
Maisie Ramsay, Wireless Week

Sprint Nextel showed some signs of a turn-around in its fourth quarter results today, posting its best numbers for new wireless subscribers in years.

The company added nearly 1.1 million new wireless subscribers, including 519,000 Sprint-branded postpaid customers as new customers on the company's CDMA network offset customer defections from Sprint's iDEN business. The company's net adds included 646,000 new prepaid customers, 393 wholesale customers and 58,000 retail postpaid subscribers, making it the first quarter with postpaid net additions since the second quarter of 2007.

"It had been almost five years since we added over a million customers in a quarter, and the annual improvement in postpaid subscriber results of 2.7 million versus the previous year is unprecedented in the history of the U.S. wireless industry," said Sprint CEO Dan Hesse in a press release. The company lost 1.13 million customers in 2009. In 2010, it added 1.77 million new customers. Sprint's subscriber base now stands at 49.9 million.

Sprint's postpaid churn fell to an all-time low for the company's fourth quarter results at 1.86 percent, from 2.11 percent in the fourth quarter 2009. Prepaid churn also improved to 4.93 percent in the fourth quarter 2010, from 5.32 percent in the fourth quarter of 2009.

Postpaid ARPU remained flat at $55, and prepaid ARPU slipped to $28 in the fourth quarter, from $31 during the same period in 2009. Sprint attributed the year-over-year decline in prepaid ARPU to increases in its Assurance Wireless customers and the addition of Virgin Mobile customers, who have lower ARPU than that of Boost Mobile customers.

The company's postpaid division posted sales of $5.47 billion, and its revenues for its prepaid brands came in at $995 million. Sales from the company's wholesale business dropped $40 million year-over-year in the fourth quarter. Overall, Sprint Nextel lost $929 million on sales of $8.3 billion in the fourth quarter 2010, improving from a net loss of $980 in the fourth quarter of 2009.

Looking ahead, Sprint said it expects to grow its postpaid customer base over the next year and predicted it will continue to generate positive free cash flow during 2011.

"We have momentum entering 2011, and in addition to offering our customers simplicity and value with our unlimited data plans, we will continue to focus on device leadership, especially in 4G, as our 18 4G devices lead the industry by a wide margin," Hesse said.

During the fourth quarter, Sprint launched several dual-mode 3G/WiMAX devices, including two laptops, a personal hot spot and the HTC Evo Shift. Through its relationship with Clearwire, Sprint WiMAX service is now available in 71 markets covering 110 million people in the United States.

Sprint's stock rose nearly 3 percent by 10 a.m. Central in trading on the New York Stock Exchange.

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