Sprint report net loss of $863 million in Q1 2012, adds 1.1 million subscribers (USA)
Sprint Nextel Corp. announced its Q1 2012 results wherein it reported a net loss of $863 million and a diluted net loss of $.29 per share for the first quarter of 2012. The company had wireless service revenues of $7.2 billion during the quarter, an increase of more than 7 percent year-over-year, driven primarily by Sprint platform postpaid ARPU growth of $4.03 – the largest year-over-year increase on record for the U.S. wireless industry. The company reported total net subscriber additions of nearly 1.1 million during the first quarter, bringing total ending subscribers to a record 56 million.
The total number of customers on the Sprint platform grew almost 4 percent sequentially including 263,000 postpaid net subscriber additions, 870,000 prepaid net subscriber additions and 785,000 wholesale and affiliate net subscriber additions. Sprint recorded more than 1.5 million iPhone sales in the first quarter with 44 percent going to new customers. Prepaid churn on the Sprint platform improved to 2.92 percent, the tenth consecutive quarter of year-over-year improvement.
According to Dan Hesse, Sprint CEO, the continuing revenue growth on the Sprint platform, which represents the future of the company, driven by record ARPU improvement and strong net subscriber growth, contributed to the Adjusted OIBDA performance of $1.2 billion. He added that the value and simplicity of their unlimited data, talk and text plans, combined with an unsurpassed customer experience and their increasingly robust device portfolio make for a strong combination.
In terms of customer experience, during the first quarter, Sprint recorded its lowest level of calls to customer care per postpaid subscriber on record, consistent with more third-party recognition of Sprint’s customer experience.
Sprint also launched several innovative products and services in addition to its 4G LTE devices. Sprint introduced its first tablet for under $100 with a two year agreement, ZTE Optik as well as ZTE Fury, a family-friendly Android-powered device. Boost Mobile began offering LG Rumor Reflex – the fifth device from Sprint with eco-friendly attributes and the second from Boost. Additionally, the company introduced Sprint Complete Collaboration, the most comprehensive hosted and fully managed unified communications bundle available for businesses and launched additional Sprint Biz 360 solutions, phone and applications for small businesses. Sprint also created New Ventures, a new organization focused on delivering new business models that leverage open platforms to drive revenue and overall customer satisfaction for the global marketplace.
Sprint, Deutsche Telekom in talks over T-Mobile USA Merger
If sources are to be believed, Deutsche Telekom AG (DTE) has held talks to sell its T-Mobile USA unit to Sprint Nextel Corp.(S) in exchange for a major stake in the combined entity.
According to sources, talks have been on and off, and a deal may not be reached. The sources added that the companies haven’t been able to agree on the valuation of T-Mobile USA, which reported a drop in profit in the fourth quarter.
Deutsche Telekom says all options open in US (Germany)
Deutsche Telekom AG’s Chief Financial Officer has stated that all options will remain open for the company in the U.S., as shares rose on speculation of a tie-up with Sprint Nextel Corp in the U.S.
The manager was responding to reports that Deutsche Telekom has held talks to sell its T-Mobile USA unit to Sprint Nextel in exchange for a major stake in the combined entity, citing people with knowledge of the matter.
Telekom CFO Tim Hoettges listed various possibilities for the company’s U.S operations including a sale of the entire business. He added bringing in a partner, an initial public offering, or network co-operation also remain as options.
Sprint, Falcone’s LightSquared in talks over network agreement
If sources are to be believed, Philip Falcone’s LightSquared Inc. wireless venture is in discussions to use Sprint Nextel Corp.’s cell sites and equipment to help build out its network.
LightSquared, backed by billionaire Falcone’s Harbinger Capital Partners hedge fund, is seeking to compete with AT&T Inc., Verizon Wireless and Clearwire Corp. in selling so-called fourth-generation wireless service that offers faster Internet browsing. Sprint buys 4G capacity from Clearwire. AT&T and Verizon are building out their own 4G networks this year.
Falcone has committed billions to challenge LightSquared’s larger and more established rivals and he is facing government deadlines for building out his network.
Falcone agreed last year to Federal Communications Commission conditions that he employs a combination satellite-terrestrial network for as many as 100 million Americans by the end of 2012 and 260 million by 2016.
Motorola Mobility sales to Verizon Wireless grew to 28% in 2009
Motorola Mobility Holdings Inc.’s sales to Verizon Wireless grew to 28% of revenue last year, highlighting the carrier’s importance to the mobile-phone maker as Verizon begins selling Apple Inc.’s rival iPhone.
According to the company, Motorola’s revenue from Verizon Wireless and parent Verizon Communications Inc. increased from 17% in 2009 and 13% in 2008. Sprint Nextel Corp. accounted for 13% and 7% of revenue in those two years.
As per the company, the loss or a significant reduction in revenue from one or more of these customers could have a negative impact on their business.
According to Motorola CEO, Sanjay Jha’s previous statement, Verizon Wireless began selling the iPhone this month, ending AT&T Inc.’s exclusive hold on the device in the U.S. The iPhone had already triggered some slowdown.
Jha is relying on the growing popularity of Google Inc.’s Android mobile-phone platform to sell more models of its phones at Verizon Wireless, AT&T and Sprint.
AT&T, Verizon 4G Wireless technology to be dominant by 2012
A new research reports has revealed that LTE, the high-speed mobile Internet standard used by AT&T Inc. and Verizon Wireless in the U.S., will become the dominant 4G network technology worldwide by 2012.
According to the report, next year, there will be more than twice as many customers for LTE as for WiMax, an alternative 4G technology used by Sprint Nextel Corp. In 2014, there will be 303.1 million LTE users worldwide, almost ten times as many customers as WiMax.
Report revealed that with WiMax enjoys a two to three-year head start in next generation network deployments. It presently enjoys a major advantage in the market share. With LTE supported by most of the leading wireless operators worldwide, it will rise to surpass WiMax.
A wider adoption of a wireless technology may help reduce prices for network equipment and phones and prompt handset makers to produce more devices for that standard.
According to Sprint, it will spend as much as $5 billion to upgrade its network in the next three to five years. The modernization plan will make it possible for Sprint to add LTE service.
4G networks provide customers with data speeds several times faster than older technology. Carriers are building out speedier infrastructure as they encourage more customers to buy data plans, which give users Web access and the ability to download games and music.
WiMax will maintain its lead this year with 14.9 million subscribers worldwide to LTE’s 10.4 million. Verizon began offering LTE to customers in some markets last year. Clearwire and Sprint have been offering WiMax service for more than two years.
Sprint plans to unveil dual-screen Android smartphone
Sprint Nextel Corp is planning to unveil a new smartphone – the Echo. The handset comes with a twin set of touchscreens made by Kyocera Corp.
According to sources, the device boasts of two 3.5-inch touchscreens that can be stacked side by side to form a pseudo-tablet design. Users can accomplish multiple tasks on the two screens, even drag items from one screen to the other.
The phone runs on Google Inc.’s Android software and uses a pivot hinge that allows one screen to be tucked under the other, transforming it into a more conventional touchscreen phone.
The prices were not disclosed by the company.
Sprint says no plans to take over Clearwire
Sprint Nextel Corp. has no plans to buy 4G partner Clearwire Corp., after it raised substantial funds with new debt.
Sprint is a 54% owner of wireless venture Clearwire, which needs to raise billions of dollars more to help it complete construction of a high-speed wireless network.
Sprint, in its previous statements disclosed that if Clearwire defaults on its debt, Sprint risks breaching of its own debt agreements as long as Clearwire is viewed by debt holders as a Sprint subsidiary.
According to Sprint, under a new agreement with Clearwire, if Sprint reduces its voting rights in Clearwire below 50%, it would avoid those risks as Clearwire would no longer be viewed as a subsidiary after such a move.
As per spokeswoman Cristi Allen, Sprint had not decided if it would take this step, but wanted the flexibility to do so in case the need arises.
Sprint also stated that while it has no plans at present to acquire Clearwire, it is still in discussions with the company regarding further investment. It has yet to decide if it will buy $760 million in Clearwire convertible bonds, which it has the right to purchase until January 2.
Verizon Wireless testing $70 unlimited mobile plan
Verizon Wireless has started testing a monthly unlimited mobile calling plan similar to one offered by Sprint Nextel Corp. in another sign of pricing pressure in the wireless business.
Verizon Wireless is offering select existing subscribers a plan that provides unlimited data, text messages and in-network mobile-to-mobile calling, as well as 450 anytime minutes, for $69.99 a month.
According to Verizon Wireless spokeswoman, this isn’t an official rate plan, and that customers who enroll get a $20 credit on their existing service.
Still, the carrier’s move highlights the competitive environment, particularly in winning over and keeping the most prosperous of customers. It also marks a continuance of an industry-wide drop in cellphone pricing plans, affecting both the high and low end of the market.
As per the reports, the move would mark the second recent step Verizon Wireless has taken to attract more users to its core service. Last month, it began offering an entry-level $15 monthly data plan. The spokeswoman declined to comment on how many people were offered the plan, or whether it would become an official offering.
The terms imitate the $69.99 Any Mobile, Any Time plan offered by Sprint, launched more than a year ago. Sprint Chief Executive Dan Hesse has often touted the success of the offering.
But Sprint’s plan allows customers to make calls to any cellphone regardless of the carrier; Verizon Wireless allows unlimited calls only within its own network.
According to Sprint spokeswoman, the company believes Sprint’s plans offer the greatest value for customers. Any Mobile Anytime continues to be a differentiator for them.
US lawmakers question China role in telecom deal
US lawmakers have raised security concerns about bids by China-based Huawei Technologies Co Ltd and ZTE to supply telecommunications equipment to US carriers. Proposed deals between Sprint Nextel Corp, Cricket, and the two Chinese companies would pose a real threat to the national security if they allowed China access to communications that traveled over the equipment, the legislators warned the head of the Federal Communications Commission.
According to the lawmakers’ letter to FCC Chairman Julius Genachowski, they are very concerned that these companies are being financed by the Chinese government and are potentially subject to significant influence by the Chinese military. Military influence on the companies may create an opportunity for manipulation of switches, routers, or software embedded in American telecommunications network so that communications can be disrupted, intercepted, tampered with, or purposely mis-routed.
US lawmakers, facing elections in two weeks in contests fought over the lethargic economy and high jobless rate, have blamed Chinese trade policies including the practice of keeping China’s currency undervalued, for taking American jobs.
The letter, latest of numerous efforts by US lawmakers to challenge China-US business deals on security grounds, was signed by Republican Senators Jon Kyl and Susan Collins, independent Senator Joseph Lieberman and Republican Representative Sue Myrick.
