1 Comment

Summary:

This summer had a lot of milestones for Sprint, some good, some bad. It closed its deals with SoftBank and Clearwire, and began a massive network transformation, but it also lost a lot of customers in process.

Sprint has been having a lot of transitional quarters lately, but even by those standards Q3 was a doozey. Sprint closed its massive investment deal with SoftBank and acquired Clearwire. It shut down one nationwide network, but began replacing it with a new LTE network. It also dealt with the aftermath of its purchase of U.S. Cellular markets in Chicago and St. Louis, relocating hundreds of thousands of customers.

Those moves were all reflected in its financial and operational performance in the third quarter. Sprint reported an operating loss of $398 million while still managing to record net profits of $383 million, mainly from a big one-time gain from a write-up on its previous investment in Clearwire.

dan-hesse-2Sprint lost 360,000 net customers, but unlike in recent quarters, that loss wasn’t a result of its Nextel customers fleeing a dying network (the final iDEN customer departed when Sprint flipped the off switch on June 30. But Sprint continued to see blowback from the Nextel shutdown as business customers that had used both CDMA and iDEN phones canceled their accounts, CEO Dan Hesse said in Sprint’s earnings call. Sprint’s ongoing construction of its new Network Vision architecture — which is tapping Nextel’s now vacant spectrum — led to more subscribers leaving.

Sprint, however, did manage to boost its prepaid customer base by 84,000 and it added 181,000 wholesale connections to its network through its growing network of mobile virtual network operators (MVNOs). The iPhone is also proving to be a success for Sprint as a means of luring in new customers. The carrier only sold 1.4 million iPhones in Q3, but 40 percent of those purchasers were new customers to Sprint.

And once the construction signs come down, Sprint will have a network to be reckoned with. On Tuesday, Sprint announced its LTE network was live in 230 cities, and it’s still on target to cover 200 million people with LTE by year-end. According to President of Network, Technology and Operations Steve Elfman, Sprint has now upgraded 26,000 cell sites to its new Network Vision gear, and 90 percent of all Sprint cellsites are either completed or in the process of upgrade.

Sprint LTE logoIn a short time, Sprint has managed to turn on CDMA voice services in Nextel’s 800 MHz and is in the process of adding LTE to the band. It’s also begun activating a new TD-LTE network in the 2.5 GHz spectrum Sprint took over from Clearwire. Though that network isn’t yet live, it’s yielding impressive results in the field – between 50 Mbps and 60 Mbps in download speeds, Elfman said. When all three LTE networks are online, Sprint will likely have more 4G capacity in major markets than any other operator with the possible exception of Verizon Wireless. Sprint plans to have 100 million people covered by the new TD-LTE network by the end of 2014, Elfman said.

About 40 percent of Sprint’s contract customers now have a CDMA phone that can support voice in the 800 MHz band, and it has a handful of devices that can tap into all three of Sprint’s LTE networks. Going forward, Elfman said, Sprint expects all new smartphones and data devices will be tri-band, which will make it much easier for it to unleash the new capacity it’s adding today.

Still, Sprint is probably going to have several more “transitional” quarters before its turnaround is complete. It will have to spend more money to keep business customers in the Nextel aftermath, and there are still 84,000 U.S. Cellular customers in Chicago and St. Louis Sprint it either needs to bring over or cut loose. Many customers are also getting impatient about Sprint’s relatively slow LTE expansion. While the 4G network is online in over 200 markets, many key cities like San Francisco have yet to see a Sprint LTE signal.

  1. Seems like an optimistic article. What it fails to mention is that despite being on 4g networks, its users are receiving slower than 3g speeds in many areas. The network “vision” has taken longer than every other major carrier and Sprint is hemorrhaging customers as a result.

    Share

Comments have been disabled for this post