RESTON, Va.-Sprint Nextel Corp. said it added 1.272 million total customers to its network during the third quarter, which was in line with guidance it provided late last month, but below the 1.697 million pro forma customers added by Sprint Corp. and Nextel Communications Inc. as separate companies during the third quarter of last year.
Sprint Nextel also reported that the channel mix was different than previous guidance as the carrier said it added 669,000 direct subscribers compared with its guidance of around 700,000 direct customer additions. Analysts noted the difference was made up by Sprint Nextel’s Boost Mobile L.L.C. prepaid subsidiary that added 300,000 customers during the third quarter compared with previous forecasts of 230,000 net subscriber additions and well above the 195,000 customers Boost added during the third quarter of last year.
Sprint Nextel’s wholesale operations, which is dominated by its Virgin Mobile USA L.L.C. mobile virtual network operator venture, contributed 213,000 customers during the third quarter compared with 422,000 customers last year. Sprint Nextel’s CDMA-based affiliates also fell short of last year’s results adding 90,000 customers during the third quarter of 2005 compared with 101,000 customers this year.
Sprint Nextel ended the third quarter with 45.6 million total customers on its network, including 36 million direct postpaid subscribers, 2 million Boost Mobile prepaid customers, 4.6 million wholesale subscribers and nearly 3.1 million CDMA affiliate customers.
Postpaid customer churn improved slightly from a pro forma 2.2 percent during the third quarter of 2004 to 2.1 percent this year, but increased sequentially from 1.9 percent during the second quarter of this year. Postpaid average revenue per user dropped 3 percent from a pro forma $67 during the third quarter of last year to $65 this year. Sprint Nextel noted that hurricane-related customer credits dropped its postpaid ARPU by 34 cents during the third quarter.
Sprint Nextel also reported Boost’s prepaid results, which included 4.9 percent customer churn and $37 in ARPU during the third quarter.
Pro forma wireless revenues surged 12 percent from $7.2 billion during the third quarter of last year to nearly $8.1 billion this year. Wireless revenues accounted for 72 percent of Sprint Nextel’s pro forma $11.2 billion in total revenues during the third quarter of this year, up from the 69.5 percent of its pro forma $10.3 billion in revenues posted during the third quarter of last year.
Adjusted net income also increased 60 percent from $462 million during the third quarter of last year, a return of 16 cents per share, to $737 million this year, a return of 25 cents per share.
