Sprint Nextel has released its earnings report for the three months ending March 31. The total group reported revenues of $10.096 billion, pretty flat compared to the $10.074 billion in revenues in the first quarter of 2006. The company made a loss of $211 million, compared to a profit of $164 million a year ago. Revenues equaled expenses, but interest expense sent the company into the red. “Our plans in 2007 call for a substantial increase in the funding of business operations to build long term growth and profitability,” said Gary Forsee, Sprint Nextel chairman and CEO. “We established a quick ramp on these investments in the first quarter to accelerate our progress. These increased commitments, along with notably higher device subsidies to drive acquisition and retention, impacted our profitability in the quarter.”
Sprint Nextel wireless reported total revenues of $8.723 billion, a year-on-year increase of 2 percent. Adjusted operating income fell by 45 percent year-on-year to $253 million. A decline in voice revenues was partially offset by a 44 percent year-on-year growth in data revenues to nearly $1.2 billion.
Subscribers: Sprint Wireless added nearly 600,000 subscribers in the quarter to bring the total subscriber base to 53.6 million, a 10 percent increase year-on-year. Of these 41.6 million were postpaid, a figure which declined by 220,000. Sprint subsidiary Boost Mobile added 275,000 subscribers for the quarter, climbing to 4.3 million, while the wholesale channels added 467,000 customers to bring the total base to 6.8 million. Affiliate channels added 46,000, coming to 945,000.
ARPU: Post-paid ARPU declined 5 percent year on year to $59 (from $60), with data ARPU coming in at $9.25, or 16 percent of total ARPU. “On the CDMA side, we’re still benefiting from higher data ARPU of about $12.25 or $12.30 versus about $5,$ 4.50 to $5 on iDEN,” said CFO Paul Saleh during the conference call.
From the conference call:
–Sprint expects to be a selling stockholder in the Virgin Mobile USA IPO.
–“Music downloads have hit over 15 million now. We obviously, with the Upstage device and with Music Store have continued to stake out our lead in that category. Messaging obviously continues to be an important application which drives revenue and we made comments about that overall,” said Forsee.
–Forsee said that about a third of the customers leaving Sprint Nextel’s iDEN network are going to a CDMA or PowerSource (CDMA/iDEN) device with Sprint.
–Sprint will launch WiMAX devices late this year in soft market launches in Chicago, Baltimore; Washington will be laptop enabling devices and handset devices will be deployed, targeted for the middle of 2008.
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