NEW YORK-At its annual investment community meeting, Sprint Corp., which is in the process of merging with Nextel Communications Inc., said it expects wireless service revenues to grow in the low double-digits this year driven by an increased customer base and continued strong average customer revenue. Sprint posted a 13.8-percent increase in service revenues between 2003 and 2004, which was boosted by a 12.2-percent sequential increase in subscriber growth and 1.2-percent increase in average revenue per user.
The company also said it expects to invest between $2.7 billion and $2.9 billion in its wireless network this year, including the deployment of CDMA2000 1x EV-DO technology and network expansion. Sprint has said it plans to offer EV-DO services across most of its network by the end of this year and added that it plans to have four Asian-sourced EV-DO handsets available when it begins commercial launches later this year.
Rival Verizon Wireless recently expanded its EV-DO offering to more than 30 markets across the country and launched three consumer-oriented handsets to its previously offered EV-DO compatible PDA and PC Card selection.
Sprint also noted during its analyst briefing that mobile virtual network operator partner Virgin Mobile USA L.L.C. was looking to increase availability of data services as well as deploy a push-to-talk service similar to Sprint PCS’ ReadyLink offering.
On the merger front, Sprint’s management noted that part of its agreement with Nextel precludes the company from entering verbal discussions, which would reduce the chance of a rumored deal with larger rival Verizon Communications Inc., and that Sprint has not received a written request for financial due diligence from another potential suitor.
Sprint also said that it would likely push off talks with its affiliates regarding the pending merger until the deal closes later this year, or even after the merged Sprint Nextel entity works out an agreement with Nextel Partners Inc. Sprint’s current affiliate arrangements prohibit Sprint from offering competing services in markets already covered by the affiliates, and would likely need to be amended once the merger is closed.
