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Summary:

Though Sprint’s new friends and family plan gained nearly 3 million subscribers, it posted net losses of nearly 400,000 subscribers in Q1. Framily may be Sprint’s future, but it’s not yet having the impact it wants.

In January, Sprint launched a major new campaign to lure in new mobile subscribers and keep old ones loyal, but the potential benefits of its “Framily” program didn’t show up in its first quarter results. The company shed nearly 400,000 subscribers as it struggles to get its LTE network rolled out nationwide and faces off against mega-carriers AT&T and Verizon as well as a newly resurgent T-Mobile.

Sprint lost a net total of 231,000 postpaid subscribers (which includes contract and non-contract subscribers who aren’t on a pay-as-you-go plans) and 364,000 prepaid subscribers. The bright spot was a gain in 212,000 wholesale subscribers, reflecting Sprint’s growing business in connecting mobile virtual network operators (MVNOs) like Tracfone, FreedomPop, Ting and Republic Wireless. The revenue it brings in from an MVNO subscriber, however, is a fraction of what it sees from a customer who buys mobile service directly from Sprint.

Sprint executives blamed the subscriber loss on the tumult created by its ongoing network overhaul. Sprint isn’t just trying to bring its LTE network coverage on par with its competitors, but it’s also rebuilding its 2G and 3G CDMA networks from scratch. Service disruptions caused by that upgrade work are causing disgruntled customers to leave, Sprint said.

Still, there are some glimmers of light at the end of this tunnel. Sprint’s LTE network now reaches 225 million people in 443 cities, so it’s within spitting distance of its mid-year goal of 250 million people covered. And while Framily didn’t stem customer losses this quarter, nearly 3 million subscribers signed up for the new friends and family plan last quarter. That’s significant but those customers are not only more likely to stick with Sprint in the future, but they’re likely to recruit new subscribers into the Sprint fold.

Framily’s incentive structure offers an increasing discount as more people join a particular plan. Since Sprint will bill each subscriber separately, Sprint can use Framily to target customers outside of a traditional family plan. These customers aren’t on contract, so they’re free to leave when they pay off their phone, but they’ll lose their accrued discounts. So if a “Framily” loses members it has a lot of incentive to replace them. At a separate event Tuesday, Sprint attempted to amplify the benefits of Framily by offering members discounts on Spotify’s subscription music streaming service.

Tom Frobinson, the hamster patriarch staring in Sprint's new Framily ad campaign (source: Sprint)

Tom Frobinson, the hamster patriarch staring in Sprint’s new Framily ad campaign (source: Sprint)

Sprint now has 54.9 million total subscribers, making it half the size of AT&T and Verizon. It reported a first quarter net loss of $151 million, compared to a $643 million loss in Q1 of 2013, off of revenue of $8.88 billion.

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  1. “Sprint executives blamed the subscriber loss on the tumult created by its ongoing network overhaul. ”

    It’s inexcusable. My 4s on Sprint has been virtually unusable in my office in a downtown so. Cal. city for more than a year (it used to work fine). My son, who lives a mile from LAX, hasn’t been able to use his sprint phone in his apartment for about six months (it used to work there).

    Yes, they are overhauling their network, but they have basically abandoned many of their current subscribers who will leave them when their contract is up. They really needed to do a better job of transitioning from old to new network, without just essentially turning off my data service for a year or so while they figure it out. I used to have 4 phones with them, I have 3 now, and by this summer it will be down to one.

    1. +1 for this. My Sprint service (iPhone 4S) gets worse by the day, all in the name of “improvement”.

  2. No amount of marketing is going to overcome an almost unusable network.

    I could have tolerated a short duration of issues, but this tower by tower, instead of area by area execution has created an absolute mess of inconsistent connectivity and performance, and when your mobile phone is your only phone, long term disruption is completely unacceptable.

    Adios Sprint, thanks for several years of excellent service, and I hope you get your act together soon.

    1. And as they’re bleeding customers, they’ve managed to “improve” ARPU… WTF? So let’s squeeze as much as we possibly can, and give the customers the crappiest service possible… NICE!!

  3. I’ve had Sprint for over 9 years, I’ve been unhappy with their service for all of them. When I moved recently and didn’t get reception in my new home, Sprint wouldn’t let me out of my contract 4 months early, and would not credit me for dropping calls every 10 seconds. When I reached out to their managers and technical support, it was as if the highest education for their executives was a GED. They were unprofessional, rude, and beyond disrespectful. I had the feeling that I was dealing with hustlers on the street negotiating for “their cut.” The only thing they failed to understand is that their terrible service was the only reason I was talking to them in the first place.

    I would not recommend this company to anyone, ever. I would rather use a payphone in the middle of Somalia with eye patches sizing me up.

    Thank you,
    Alex

  4. I’m a long time Sprint user in Southern California, and there “network upgrade” has been horrible. Lately, LTE performance is so bad I’ve actually turned off LTE because the old 3G network is faster.

  5. Sprint is a joke, they catered to the less fortunate with bad credit for over 15 years, but now it is catching up with them. I’m glad their competitors are putting them out of business, they are nothing but crooks..

  6. I had Sprint for a long time too. I liked them. But I had basically was paying for no data – it was too slow. I bought a 4LTE fone hoping that it would come and it never did. So i switched to T-mobile when they offered to pay my ETF. Now i have high speed data when i need it (usually don’t because of WiFi), WiFI calling built in and I am saving $140 a month.

  7. I love Sprint. They are the only provider that doesn’t contribute large sums of money to the republican party, which is important to me and the reason I switched. (Don’t be a hater, use who you wish… just sayin.)
    Having said that, they are not honest about their coverage. I barely have a 4LTE signal here in the middle of Atlanta and their map shows complete coverage. I have been told several times that the legacy equipment on the towers are being replaced and I should have a better signal soon. That was almost a year ago and still a lousy signal with dropped calls.
    I hope they get the shizzle together soon.

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