Quarterly results include positive postpaid, prepaid growth
Sprint’s aggressive marketing efforts appeared to have paid off as the beleaguered carrier said it added nearly 1 million direct net customers to its network during the final three months of 2014.
Specifically, Sprint said its branded offering attracted 30,000 net postpaid customers, 410,000 net prepaid subscribers and 527,000 net wholesale additions. The carrier noted the postpaid growth was due to its highest gross additions in three years and that the percentage of “prime” customers was its highest ever.
The reported growth was a strong turnaround from the previous quarter in which Sprint lost 336,000 postpaid and 20,000 prepaid customers, numbers that were somewhat offset by gaining 840,000 connections via its wholesale and affiliate channels. Year-over-year, Sprint doubled the 477,000 net customer additions it posted for the final three months of 2013, which were mostly on the back of its direct prepaid operations as well as continued growth from affiliates and wholesale partners.
Sprint did not release any financial numbers for its latest quarter, something that could show an impact from the carrier’s aggressive marketing efforts. During its second fiscal quarter, Sprint posted mixed financial results that showed year-over-year improvements, but were down sequentially. During its third fiscal quarter, Sprint unveiled a number of new marketing schemes designed to attract postpaid customers, but potentially at the expense of its bottom line. Sprint’s management acknowledged that possibility, but argued that it needed to first focus on turning around customer defections before worrying about the financial repercussions.
Sprint has also announced plans to cut jobs in an attempt to better align its current workforce with operational performance. Those moves are expected to boost the bottom line, but risk damaging employee morale at a time when the carrier is looking to provide a new face to consumers.
Sprint’s bottom line was somewhat bolstered earlier this week when the carrier announced it scored $2.1 billion in new financing from vendors and banks that should help the carrier continue the buildout of its 2.5 GHz-based Spark network initiative.
Competitive quarter
Sprint’s release of preliminary quarterly numbers followed a similar announcement from T-Mobile US, which this week said it added 2.1 million net connections to its network during the final three months of 2014. The nation’s No. 4 carrier said the growth included 1 million postpaid “phone” net additions; approximately 300,000 postpaid nonphone net additions; and 266,000 branded prepaid net additions, which includes the carrier’s MetroPCS brand. T-Mobile US’ wholesale operations managed to add 586,000 net connections during Q4.
As for its rivals, T-Mobile US said during Q4 it held a 1.4 to 1 positive postpaid porting ratio with Verizon Wireless; 1.8 to 1 positive porting ratio with AT&T Mobility; and a 2.2 to 1 positive porting ratio with Sprint. T-Mobile US added that those trends have continued into the new year.
T-Mobile US CEO John Legere had previously stated that the carrier could surpass Sprint as the nation’s No. 3 operator by the end of 2014, a prediction he has since modified to 2015.
Verizon Wireless recently hinted of increased competitive pressure during the final three months of 2014, which is expected to result in higher churn and an impact on revenue margins.
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