Could be worse: Sprint Nextel shows improvements, gains 600,000 customers

Sprint Nextel Corp. continued to lose postpaid customers in the first quarter, but did better than analysts had expected. The carrier gained almost 600,000 net new subscribers despite continuing overall losses in postpaid customers due to fleeing iDEN users.
Postpaid subs declined by 220,000, reflecting a loss of about 1.1 million iDEN subscribers, according to Ken Hyers of Technology Business Research Inc. The losses were mostly offset by gains in CDMA subscribers, according to Sprint Nextel, and reflected slowing losses of postpaid customers. The carrier lost 306,000 postpaid subscribers during the first quarter of 2006.
Sprint Nextel’s wholesale channel and Boost Mobile L.L.C. brand put the carrier in the black on net adds. Boost added 275,000 customers to bring its base to about 4.3 million. Wholesale channels, including MVNOs and affiliates, added 467,000 subscribers for a customer base of 6.8 million.
Sprint Nextel executives maintained that the company is still on track to return to positive net postpaid additions by the second quarter.
Sprint Nextel said it serves a total of 41.6 million postpaid subscribers, with the breakdown of 24.7 million on its CDMA network, 16.5 million on iDEN and 400,000 Powersource customers who use a dual-mode phones to access both networks.
Boost’s churn increased from 5.4% in the year-ago quarter to 7% due to “actions to remove inactive subscribers,” according to the carrier. Sprint Nextel’s postpaid churn was 2.3%, up from 2.1% in the first quarter of 2006 and flat sequentially.
Sprint Nextel’s postpaid average revenue per user stood at $59, a year-over-year decline of around 5% and sequential decline of about 2%. Most of the decline came from a 9% drop in iDEN ARPU, accompanied by a 1% ARPU drop for CDMA postpaid subscribers, the company reported.
The company posted a net loss for the quarter of $211 million, compared with net income of $419 million in the first quarter of 2006. Still, Sprint Nextel’s stock was up close to 3 percent in midday trading.