Sprint Nextel Corp. reported a fall in revenue greater than experts expected through the fourth quarter. As the third-largest wireless carrier in the United States, Sprint lost customers to competitors in the wireless market.
Sprint struggled to keep up with AT&T’s iPhone and Verizon Wireless’s Droid throughout the Christmas season. They offered fantastic deals on the Palm Pre and new phones to attract enough new subscribers to keep up, but to no avail. Overall, Sprint’s customer level fell by 148,000.
After this announcement, the stock dropped 6.7% to $7.87 billion. This was the largest drop in stock in six months. Throughout the past year, Sprints stock’s has doubled its size.
Sprint says they believe that their subscriber losses will decline this year. They plan to produce fourth-generation devices that have excellent wireless Internet connections.
At the same time, Sprint recently finished buying Virgin Mobile USA Inc. Virgin Mobile is a prepaid wireless service provider and is working through them to increase prepaid customer satisfaction.
Sprint increased their subscribers through offering prepaid plans by 435,000. They expect prepaid plan subscribers to continue increasing, while the decrease of contract customers steadily declines.
Similar to many other companies, Sprint has had to close call centers and cut jobs in order to make ends meet. Sprint’s efforts to attract customers through promotions and lowering of monthly bills contributed to Sprint’s overall loss.
However, Sprint believes that the company will continue to grow. They predict that capital spending will reach $1.6 billion in comparison to the $2 billion of last year.
Chris King,the analyst at Stifel Nicolaus & Co.,said, “It’s certainly challenging with AT&T and Verizon out there… No one’s ever really taken any market share away from Verizon or AT&T ever in the wireless industry, and Sprint’s in a position where they have to do that to stabilize their subscriber base.”
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To read more about Sprint’s fourth quarter losses visit:
http://www.bloomberg.com/apps/news?pid=20601103&sid=a3D0XHMyavCs
