Quarterly results from Verizon Wireless and Sprint Nextel Corp. came as no surprise: Verizon Wireless did well and Sprint Nextel didn’t.
Although Verizon Wireless was outpaced in net customer additions by AT&T Mobility, the carrier added 1.8 million net retail customers during the third quarter, which was slightly offset by losses of about 115,000 customers from its wholesale business, leaving Verizon Wireless with 1.6 million net new subscribers.
Verizon Wireless now has 63.7 million customers, 97% of whom are retail customers. The industry’s No. 1 carrier, AT&T Mobility, counted 65.7 million customers at the end of the quarter.
Verizon Wireless’ total revenues were up 14.4% year-over-year to about $11.3 billion. Income for the business gained 21.6% on the same quarter a year ago at $978 million.
Sprint Nextel fizzles
Meanwhile, Sprint Nextel’s quarterly profits plunged as the carrier bled postpaid iDEN and prepaid Boost Mobile L.L.C. subscribers, posting a net loss of 60,000 subscribers for the quarter. The net loss was due mostly to the loss of 337,000 postpaid customers.
The company’s net income fell from $279 million in the third quarter of 2006 to $64 million this year.
Sprint Nextel said that its customer results reflected “mixed performance between network platforms,” including growth from CDMA postpaid subs, its new Boost Unlimited offer, which uses its CDMA network, and wholesale and affiliate channels-which was offset by losses from iDEN postpaid and Boost prepaid subscribers.
During the third quarter of 2006, Sprint Nextel reported a loss of 188,000 postpaid customers.
Paul Saleh, CFO and acting CEO of the company since the departure of chairman and CEO Gary Forsee, said that another factor was “credit market impacts on a portion of our customer base.” He told analysts in a conference call that the struggling company has two goals: improve the customer experience across the board, and simplify its business.
Not making much progress
However, the company may find it difficult to simplify when it has set itself up with a multi-brand strategy-involving cable, Boost, MVNOs and affiliates and most recently, its Xohm brand for WiMAX. Saleh also spoke of “reinvigorating” the Nextel Direct Connect franchise with new handsets and the launch of Qchat push-to-talk service on its CDMA network early next year.
“It’s not good,” said analyst John Byrne of Technology Business Research Inc. of the company’s results. “It shows that for all their talk about turning things around, they’re not that much further along than they were a year ago.” And, he added, “a lot of the things they’re talking about doing now were things they were talking about doing then”-such as improvements in customer care.
Saleh did note that both the company’s CDMA and iDEN networks are recording their best-ever performance; however, Byrne said the company faces a tough sell to get disillusioned iDEN customers back, despite the network improvements.
Saleh gave no specific updates on Sprint Nextel’s CEO search, and would say only that the board of directors was “working to fill the role as expeditiously as possible.”
