Sprint Nextel profits plunged a whopping 77 percent in the third quarter, with the carrier posting a net loss of 60,000 subscribers for the quarter.
Net income fell to $64 million this year, compared with $279 million in the third quarter of 2006.
While the third-largest wireless provider continues to lose overall market share to rivals AT&T Inc and Verizon Wireless, the subscriber losses were largest within its prepaid Boost Mobile accounts, Sprint said, and it warned that the fourth quarter would bring more of the same. Its Boost Mobile prepaid churn rate was 6.2 percent, compared with its postpaid churn rate of 2.3 percent. Paul Saleh, acting CEO in the wake of Gary Forsee’s departure last month, said that a main company goal was to improve the customer experience across the board to stem the bleeding.
Sprint also saw churn in its iDEN accounts, inherited from the merger with Nextel. Nonetheless, Sprint is committed to the Nextel Direct Connect franchise, Saleh noted, and plans to introduce three new iDEN devices in the near future.
Sprint, which is still on the hunt for a new CEO, has reported subscriber losses for the last four quarters (it now totals only 54 million customers), and has lost more than a third of its value since the Nextel acquisition in 2005. Comparatively, AT&T and Verizon Wireless both reported gains for the quarter.
Saleh did say that the company’s WiMAX plans are on track, and that Sprint will launch the “QChat” CDMA push-to-talk service next year. Pivot, however, has been put on hold; the fixed-mobile convergence services that are a result of carrier’s joint venture with the cable companies will not be expanded to new markets.
In separate news, Sprint also said it sold its airport Wi-Fi hotspot footprint to Boingo LLC.
Shares tumbled 5 percent on the earnings news.
Sprint Nextel www.sprint.com
