5 Comments

Summary:

Unlike the many consumers facing unsympathetic lenders, when you’re a money-losing telecommunications firm that has a $9.39 billion market cap, you can still renegotiate your debt. Today after reporting a third quarter loss of $326 million and the defection of 1.3 million customers, Sprint said it had renegotiated its debt.

[qi:083] Unlike the many consumers facing unsympathetic lenders, when you’re a money-losing telecommunications firm with a $9.39 billion market cap, you can still renegotiate your debt. Today, after reporting a third-quarter loss of $326 million and the defection of 1.3 million customers, Sprint said it had done just that. Under the terms of its new credit facility, the troubled telecom has less money available to it, but has the ability to take on a greater debt load relative to its earnings without breaking its loan covenants and risking a technical default.

The renegotiated debt gives Sprint some breathing room while it tries to stem the loss of its customers. Of those that left the carrier in the most recent quarter, 1.1 million were high-value, post-paid customers that pay monthly as part of a contract with the carrier. Sprint also said it expected “continued pressure on post-paid subscribers” in the fourth quarter — a sign that could doom its turnaround efforts.

When it reported second-quarter results in August, Sprint said it expected customer defections to ease in the last few months of 2008. They appear to be accelerating. In the first quarter, the company lost 1.1 million subscribers, 1.07 million of whom were post-paid. During the second quarter, Sprint lost another 901,000 subscribers, 776,000 of whom were post-paid. Renegotiating debt will help, but Sprint has to figure out how to keep its customers on board.

You’re subscribed! If you like, you can update your settings

  1. Sailingwindward Friday, November 7, 2008

    This is what happens to a company when they break the law and give out customers information to the government without a warrant, and then begs for retroactive immunity, serves them right, I hope they go out of business.

  2. Sailingwindward – I thought Sprint told the government no while ATT allowed the government to do as they wished with their customer base.

  3. Sprint reminds me a lot of Palm. A once-great company with cutting-edge tech, ruined by pathologically bad management. You keep hoping for better things, but one day you realize it’s not going to happen. And meanwhile other companies have been hard at work improving themselves. So you move on. Bye.

  4. Sprint Loses Less Money, More Subscribers Thursday, February 19, 2009

    [...] his arrival– and had said they should ease at the end of 2008. Instead Sprint has seen about 4.6 million subscribers defect in the last year with 2.6 million leaving in the second [...]

  5. How much time does Sprint’s management have left? | Thursday, February 19, 2009

    [...] since his arrival — and had said it should ease at the end of 2008. Instead Sprint saw about 4.6 million subscribers defect in the last year, with 2.6 million leaving in the second half. [...]

Comments have been disabled for this post