Sprint's Loss Widens, Fewer Subscribers

Sprint Nextel Corp., the No. 3 U.S. wireless service provider, said today it had a larger first-quarter deficit as revenue fell, it lost more than a million subscribers and it absorbed charges for severance and other costs.

Sprint said its total subscriber base fell by 1.09 million to 52.8 million, including the loss of 1.07 million post-paid customers who pay a monthly bill - actually smaller than the 1.2 million in post-paid losses the company had forecast last quarter.

The company reported a wider loss as customers defected to larger rivals and forecast only marginal improvements in the current quarter. Sprint reported a loss of $505 million, or 18 cents per share, in the three months ended March 31 compared with a loss of $211 million, or 7 per share, during the first quarter of last year.

Revenue fell 7.5 percent to $9.3 billion from $10.1 billion a year earlier.

During the first quarter, Sprint introduced a $99.99 plan that provides unlimited voice and data services, undercutting by price its chief rivals AT&T Mobility and Verizon Wireless' similar unlimited plans.

"As expected, our Wireless business delivered weak financial results. While the business will continue to face challenges in the short term, we are making progress in methodically attacking the sources of our performance issues," said Dan Hesse, Sprint Nextel CEO. "We have strengthened our hand with last week's 4G announcement, which captures and leverages the value of Sprint's sizable spectrum holdings, provides Sprint with additional financial flexibility, gives us a time-to-market advantage over our competitors in the important growth area of wireless broadband, and allows Sprint management to focus our resources and attention on improving the performance of our core business.

Last week, Sprint and Clearwire resurrected plans to offer high-speed mobile Internet service. The two companies will combine their wireless broadband units to create a $14.55 billion communications company, to be called Clearwire, that will continue developing a mobile network based on WiMax technology.

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