RESTON, Va.—Sprint Nextel Corp.’s earnings took a hit from merger-related expenses, but the company’s wireless segment stepped into the limelight with 2 million net additional customers, tying a record performance by Verizon Wireless and outshining Cingular Wireless L.L.C.’s 1.8 million net adds.
The top three U.S. carriers added a whopping 5.8 million customers in the final quarter of 2005.
Sprint reported consolidated net income of just $197 million for the period, compared with $437 million in the fourth quarter of 2004. In Sprint’s wireless segment, the company’s net operating revenues were up 10 percent to $8.23 million from $7.45 million pro forma for the quarter and up 13 percent, to $31.7 million, for the year, compared with $28.1 million pro forma for 2004. The pro forma figures reflected Sprint’s merger with Nextel Communications Inc. and acquisition of various affiliates during the course of the year, including US Unwired, Gulf Coast and IWO Holdings Inc.
Sprint’s customer numbers continued a record growth spurt for the industry in the fourth quarter; the operator added 746,000 postpaid customers, 624,000 prepaid Boost Mobile customers and 651,000 wholesale and affiliate customers. Those figures brought Sprint’s customer numbers for 2005 to 6.8 million net adds, with a breakdown of 3.4 million postpaid, 1.5 million prepaid and 1.9 million wholesale or affiliate customers. Sprint ended the year with 47.6 million customers.
Sprint’s postpaid churn rate was 2.1 percent, holding steady from the third quarter of 2005 and down from 2.2 percent in the same quarter of 2004. Boost Mobile customer churn stood at 4.6 percent. Average revenue per user was down slightly, as for most carriers, to $63 from $65 for the fourth quarter of 2004; however, the company noted, data services grew nearly 50 percent in the quarter-over-quarter comparison and now account for $6 of postpaid ARPU.
Sprint reported modest declines in long-distance voice revenue (6 percent year over year) and gains of 4 percent of net operating revenue of its local division; according to Sprint, the growth was driven by growth in data services.
