Sprint posted another quarter of big subscriber losses thanks to the continued flight of customers from Nextel’s sinking ship.
In the first quarter, the country’s No. 3 carrier managed to sell 5 million smartphones — including 1.5 million iPhone activations — add half a million new CDMA prepaid subscribers and even boost its average revenue per customer. But the impending shutdown of Nextel’s iDEN network continues to weigh on Sprint’s performance, and the company acknowledged it would continue to do so until the final Nextel cell site is turned off on June 30.
Sprint’s Q1 revenues remained flat year over year at $8.8 billion, but the company’s losses narrowed from $863 million to $643 million.
Nextel shed 771,000 customers, but Sprint managed to recapture 46 percent of them bringing them over to a CDMA service. That leaves 1.3 million remaining iDEN subscribers, which will have to go in the next few months.
That means Sprint is in for an even more painful quarter of subscriber losses in the second quarter, and according to CFO Joseph Euteneuer those holdouts will be the most difficult to recapture. He said Sprint is predicting a recapture rate between 30 and 40 percent in Q2.
Once that final Nextel transmitter goes dark, though, Sprint won’t waste any time putting Nextel’s old 800 MHz spectrum back to work. President of Network Operations Steve Elfman said Sprint has already begun replacing shutdown iDEN sites with CDMA, and in the fourth quarter Sprint will expand its LTE network into 800 MHz. That will add considerable capacity to its 4G network, and 800 MHz’s low frequencies will give it better range.
Sprint’s biggest gains were across its numerous brands. It added 568,000 prepaid CDMA subscribers, but its contract customer gains were marginal and it lost 224,000 wholesale and affiliate connections. When you add all of the loss and gain numbers up Sprint posted an overall net subscriber loss of 415,000 for the quarter. It now has a total of 55.2 million customers.