Sprint financials hide operational slowdown
Telegeography writes…Sprint Nextel has posted increases in fourth-quarter revenues and profits, but the results mask a worrying decline in its post-paid subscriber base. The firm said sales for the final three months of 2006 reached USD10.44 billion, up from USD9.79 billion a year earlier. Net income increased from USD197 million to USD261 million. Although the cellco’s overall customer base rose to just over 53 million, from 51.9 million at the end of September, 830,000 of the net new additions were wholesale customers who have signed up with resellers such as Virgin Mobile, while another 440,000 were acquired from affiliate operations. Pre-paid retail customer numbers rose by 171,000 over the quarter, while the most lucrative segment post-paid contract users saw a net fall of 306,000 customers. The iDEN network, which was operated by Nextel before its merger with Sprint, is accounting for the bulk of the customer losses, as users move to either to Sprint’s CDMA-based systems or competing networks. Sprint Nextel’s closest rivals in the US wireless market, Verizon and AT&T/Cingular, both posted strong customer gains in the fourth quarter, while smaller operators such as T-Mobile and Alltel have also been taking market share.
Sonaecom looking for alternatives
Telegeography writes…Reports from Portugal suggest that Sonaecom will consider a merger with the country’s second largest cellular operator Vodafone if it fails with its current takeover bid for Portugal Telecom (PT). Diario Economico claims that Sonaecom is also considering other alternatives, including switching its focus to PT’s cable unit PT Multimedia or its mobile subsidiary TMN. Sonaecom has offered EUR10.50 per share for PT, with the offer closing at the end of next week.
Meanwhile, AFX reports that Sonaecom is prepared to match any dividend package that has been offered by PT to its shareholders as both companies try to win support for their respective strategies. PT shareholders are meeting tomorrow to decide whether to increase the 10% voting rights limit; a decision to keep the limit would mean an end to Sonaecom’s takeover battle. Sonaecom is the sole owner of Portugal’s third largest cellular operator, Optimus.
MegaFon to appeal interconnect ruling
Telegeography writes…A Russian arbitration court has ruled that the country’s third largest cellular operator MegaFon must offer the same interconnect cost to smaller rivals that it does to its two larger competitors, MTS and Vimpelcom. The big three operators cut the interconnect rate for calls between their respective networks to RUB0.95 (USD0.036) per minute in July last year, while keeping the fee charged to minor players at RUB1.10. Vimpelcom and MTS moved to bring all charges down to the lower level when regulators threatened legal action in October, but MegaFon decided to fight its case in court. Prime Tass says that MegaFon intends to launch a new appeal against the ruling. The news agency quotes Alexei Nichiporenko, MegaFon’s first deputy general director, who said: ‘We are still convinced that the decision of the Federal Antimonopoly Service contradicts the law.’
Liberty gets go-ahead for Telenet move
Telegeography writes…The European Commission has given the green light to Liberty Global Inc (LGI)’s move to take control of Belgian cable operator Telenet. LGI has increased its stake in Telenet to 28.07% and will now consolidate the company for accounting purposes. Telenet merged with LGI unit UPC late last year and is Belgium’s largest cable operator, offering a range of TV, internet and telephony services over its networks.
