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Subscriber Growth ‘Increasingly Difficult’ for Sprint

Sprint, fresh off a flurry of M&A activity, still has a challenging future ahead, at least according to one industry insider.

America’s third-largest wireless operator just wrapped its acquisition of broadband provider Clearwire. Sprint also sold more than two-thirds of its company to SoftBank of Japan, creating a “New Sprint” that the communications giant hopes will make it more competitive with rivals AT&T and Verizon Wireless.

But with any merger comes a significant transition period, and acquisitions of this size offer even more challenges.

” … We believe the organic subscriber growth going forward will be increasingly difficult for Sprint,” noted Canaccord Genuity analyst Greg Miller, commenting ahead of the carrier’s earnings report next week. We believe the new Sprint faces a wireless industry that is becoming increasingly competitive given a stronger [T-Mobile USA], increased focus on prepaid by AT&T and continued aggressive rollout of LTE network[s] by all national carriers.”

T-Mobile, America’s fourth-largest wireless provider, earlier this year closed its purchase of MetroPCS, the fifth-largest operator that specializes in prepaid plans. Verizon and AT&T continue to add new contract subscribers about a half-million for AT&T last quarter and more than 900,000 for Verizon. And AT&T is in the process of buying Leap Wireless, whose Cricket Communications brand will improve AT&T’s position in prepaid.

Canaccord maintained its “hold” rating on Sprint stock, which has fallen about 18 percent since the beginning of July.

Follow senior online managing editor @Craig_Galbraithon Twitter.


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