Sprint Nextel posts Q1 losses

Sprint Nextel reported first-quarter losses of $211 million as well as the defections of 222,000 post-paid subscribers, supporting growing concern the third-largest U.S. operator is losing significant market share to its rivals. According to Sprint Nextel, total wireless revenue increased two percent to $8.72 million, while adjusted operating earnings tumbled 45 percent. Postpaid ARPU was just over $59, off nearly five percent from the year-ago period and slightly under two percent sequentially.

Data service revenues amounted to close to $1.2 billion in Q1, an increase of 44 percent over the year-ago period and a five percent sequential increase. Data contributed $9.25 or 16 percent of overall ARPU in the quarter, representing more than 20 percent of CDMA ARPU. Sprint’s Boost Mobile affiliate posted ARPU of a little more than $32 for the quarter, a two percent sequential improvement but a 12% drop from a year ago.

“In the quarter, we had solid performance in our CDMA post-paid business, including sequential growth in both gross and net additions and improved customer churn,” said Sprint Nextel chairman and CEO Gary Forsee in a prepared statement. “We also achieved a stronger Boost Mobile customer gain, continued growth in MVNO channels and good velocity with PowerSource sales. Together, these four lines of business generated 1.3 million net additions during the first quarter. However, these gains were partially offset by a decline in the iDEN post-paid subscriber base reflecting prior network constraints, which have since been largely mitigated.”

Sprint’s earnings follow on the heels of Q1 reports by rivals AT&T and Verizon. By comparison, AT&T reported first-quarter profits of $2.8 billion, with total wireless revenues growing 11.2 percent to $10 billion and wireless data revenues increasing 66.8 percent over Q1 2006 to $1.5 billion. Earlier this week, Verizon Communications posted an earnings decline of 8.4 percent to $1.5 billion, with losses attributed to divested operations; Verizon Wireless nevertheless posted Q1 2007 revenue growth of 17 percent to $10.31 billion, with subscribers completing 106 million music, video, game, ringtone, ringback and exclusive content downloads during the quarter.

For more on the Sprint earnings:
- read this release

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