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The bad news for Sprint is growing

Sprint has tried to stay competitive through a variety of methods.  It released new smartphones and sought to expand its wireless offerings.  However, despite its best efforts, the nation's third largest carrier lost more ground to it larger competitors, AT&T and Verizon, in Q1 2008.

The traditional Sprint network and the Nextel division of Sprint -- the mobile phone network which it acquired for $35 billion in 2005 -- currently have 52.8 million subscribers after losing over 1.1 million customers during the quarter.  The lost customers are "post-paid" customers, meaning customers who usually pay a monthly bill.  The loss indicates growing trouble.  In all of 2007, Sprint only lost 1.2 million customers, but steep losses began in Q4 2007, with the departure of 1.07 million customers.

These losses are particularly notable as Sprint has various severance penalties to try to dissuade customers from leaving.  The large customer exodus indicates that customers are willing to pay the price to ditch Sprint, a very bad sign for the carrier. 

As a result of the losses, Sprint saw its revenue fall 7.5 percent to $9.33B USD.  In all the company lost $505M USD over the quarter, up from a $202M USD loss the year prior.

The losses have Sprint reeling.  CEO Dan Hesse refused to comment on rumors that Sprint may dump Nextel to focus on its own cell phone network.  He did say that such a move would involve "significant complexities".

The merger has been a painful process for Sprint, and has gone rather poorly.  Nextel has been blasted by customers for its poor service quality, among the reason many are switching.  Also it notoriously cancelled over a thousand customers last year who were too "needy", which they described as calling customer service too many times.  Many customers have also griped that Nextel's network provides poor handset choices compared to Verizon, or AT&T, which offers the popular iPhone.

Now losing 2.45 percent of its customers per quarter, a new high "churn rate", Sprint is likely to start to make bigger moves to try to stay afloat.  And meanwhile it can only stare resentfully at its rivals.  AT&T gained 1.3 million subscribers during Q1 2008, while Verizon gained 1.5 million.  It appears Sprint's loss is truly its competitor's gain.

Hesse remained optimistic despite the bad news, reiterating his prior stance that the company would need several quarters to recover.  He stated rosily that he saw "improved profitability in the long term" based on the current results.  He also pointed to the new "Simply Everything" plan which offered unlimited voice, data, text messaging, and Web surfing for $99.99 a month as an example of a promising development.

Still with its hemorrhaging of customers and piling financial losses the outlook is not necessarily so bright for Sprint, if it doesn't make big changes.  The results are already being felt -- early this year Sprint announced that it was laying of 4,000 workers and closing 8 percent of its stores.  Additionally its CFO, CMO, and one of its division Presidents were ousted.

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Why Stay?
By mikefarinha on 5/12/2008 2:17:43 PM , Rating: 5
I've been a member of Sprint service for over 5 years.

I don't know how other companies treat their customers but you would think companies should be constantly enticing loyal customers to stay.

Perhaps some sort of deal where you get 1 week of no-cost minutes for each year with the company.

Once mine and my wifes service is out of the current contract we'll be going to another provider.




RE: Why Stay?
By djc208 on 5/12/2008 2:29:36 PM , Rating: 2
They've offered me bonuses to stay. I renewed my contract last year when they called and offered me 3 months free. I've gotten discounts and free plan upgrades as well. At one point I had the 350 minutes, the government discount (13 or 15%), free mobil-to-mobil, and nights and weekends starting at 8 for $25/month.

Any more my biggest problem is finding phones that don't have cameras and aren't crap. I don't need a Blackberry but I don't want the crappy "free" phone either. Unfortunatly just about everything else has a camera, which isn't allowed at my work. Sprint actually has two nice Sanyo phones that don't have a camera and aren't bare-bones.


RE: Why Stay?
By FITCamaro on 5/12/2008 2:42:43 PM , Rating: 2
I also work with a government contractor but luckily, our office allows phones in the workplace that have cameras. It is quite hard these days to find one without a camera. Especially a good phone.


RE: Why Stay?
By FITCamaro on 5/12/2008 2:51:13 PM , Rating: 2
And we get a 15% discount at our company with Verizon. Covers the taxes.


RE: Why Stay?
By yacoub on 5/12/2008 3:47:46 PM , Rating: 2
our company does business w/ Sprint, Verizon, and AT&T and I get 20% off my bill with Sprint, but over the last number of months I've seen the bill tick up to the point now where the discount is only effectively about 10%. If this keeps up I'll dump then and go with Verizon or AT&T.


RE: Why Stay?
By 16nm on 5/12/2008 6:41:39 PM , Rating: 2
I think Sprint should experiment with dropping the prices of their new "Simply Everything" plan. I wonder if more people would be willing to accept their inferior network if they had it all for $50/mo. The problem is that Sprint need newer technology but no money and too poor credit to get it. Why stay with Sprint when you can have superior service for about the same amount of money elsewhere. They should try to grow their subscribers with what they have by selling it at a rock bottom price.


RE: Why Stay?
By afkrotch on 5/12/2008 2:45:59 PM , Rating: 4
I use to use NTT Docomo Japan. Great service. Their incentive to stay was I think at the 3 to 5 year mark, your monthly cost would also go down. You also accumulated points. These points could be traded in for a new cellphone. The more phones you have on their service, the more points you gained.

http://www.afkrotch.com/Random_Pics/Phone.JPG

Loved my old P901is. When in Japan, do like the Japanese. Young ppl will get a light colored phone, silver, white, etc. Also throw on a few cellphone straps. Which, to my dismay, the US doesn't do. Not to mention, it's all about customizing. Most do the cellphone straps, but my phone also had replacement faceplates.

The US needs to spice up their cellphones. Europe needs to do the same.


RE: Why Stay?
By FITCamaro on 5/12/08, Rating: 0
RE: Why Stay?
By afkrotch on 5/12/2008 3:07:19 PM , Rating: 5
Yep, Japanese cellphones rock. You have a text reader, that will read a sentence, then copy it into the phone. Barcode scanner, which would direct you to website. Have a face/fingerprint authentication. The RFID allowed you to use your cellphone as a train pass, credit card, or a key to unlock your doors. Then your standard gamut of features like digicam, video teleconferencing, gps, music, vids, text, web, etc.

Other phones had analog tv, high speed internet (around 3 mbps service), and so on.

Lose your phone? No prob, call the phone and brick it.


RE: Why Stay?
By Locutus465 on 5/12/2008 2:55:19 PM , Rating: 2
I've been with Verizon since '02 and over all I've been very happy with them. No they're not nessarly the cheapest provider but they do treat me fairly and frankly I have coverage everywhere I go.

I considered sprint at first (at the time I worked at radio shack and had a good deal with both) but Verizon's superior network is what swayed me. I think at the end of the day if Sprint wants to stay in the game they need to focus on their network, this business of really only covering major cities and highways isn't going to be good enough long term.


RE: Why Stay?
By darkpaw on 5/12/2008 3:22:32 PM , Rating: 2
I also have been extremely unhappy with their service. The service quality in downtown DC is abysmal in many places. I'm roaming on Verizon constantly, thankfully I don't pay a roaming charge. The customer "service" representatives are probably the worst I have ever delt with as far as resolving issues. Originally, both my wife and my phone were on the same bill, but for some reason they split it out to two separate bills and have never been able to fix it. It took me several hours just to explain to the idiots what the problem was, they promise to fix it, never do.

The phone I got from their webstore has been a lemon since day one, but they refused to replace it since it had more then 30 minutes on it and they've completely refused to do anything about it without paying for a full new phone and signing another 2 year contract.

If the service wasn't so cheap, I would have bought out my contract and left already. Problem is, Verizon would charge three times as much as what I'm paying Sprint, so for now I put up with the problems.


RE: Why Stay?
By Kougar on 5/12/2008 6:00:50 PM , Rating: 2
Sounds like my family. We've used Sprint phones for that long... no incentive was given to stay, so we all migrated to an AT&T plan, with better phones that was cheaper.

AT&T's customer support is much worse than Sprints, but what do you expect for a telco conglomerate.


RE: Why Stay?
By 16nm on 5/12/2008 6:54:10 PM , Rating: 2
quote:
AT&T's customer support is much worse than Sprints, but what do you expect for a telco conglomerate.

Yes, AT&T support is quite awful. I have been trying to get them to repair static in my line since January. They just can't seem to track it down. It takes three times as long as it should to do anything because they have so many departments and each has to have their part in the repair. And god forbid someone should make a mistake because the whole repair process has to start over again.

I'm glad to learn that I'm not the only one dissatisfied w/AT&T support.


RE: Why Stay?
By Andrwken on 5/13/2008 4:42:44 AM , Rating: 2
quote:
It takes three times as long as it should to do anything because they have so many departments and each has to have their part in the repair.


Don't blame that on the large telco's. Thank your wonderful government. Two years ago I was having trouble with my DSL signal and dropping connection. I jumped through hoops for about 3 months as it was a very sporadic when it would drop. I had to explain that at the same time the DSL dropped the phone would get noisy. First the DSL tech would come out, then he would send out the Phone-side tech (this went back and forth for about 2 months). The DSL tech finally mentioned a faulty bridge tap in the line. I asked him why don't you fix it? His response was "I can't, government regulations require the ISP and Phone operations to be separate, and as long as it's a line issue, phone side has to come out." Turned out it was a bad bridge tap and when one of my neighbors used his phone, my line would short out. They wasted probably an extra 2 months of my time because the guy who knew what the problem was couldn't fix it.

Thanks to the cable companies wanting a piece of the telco's pie, the government has since removed regulations on AT&T for such matters and they now are being cross-trained.

It's always humorous to see how things run when the government is involved.


RE: Why Stay?
By sprintSUCKS on 5/13/2008 6:55:03 AM , Rating: 1
Sprint service is nothing more than a con. I have had them try and add services just about every month. My wife and I are in our fifties and they tried to say she woke up at 2:00am and added internet service....give me a break. She doesn't even know the password. I am sick and tired of calling them just about every month to straighten out the bill. Come Dec. they are history.I don't care even if they offer the service for ten cent a month I still wouldn't stay with them. The amount of dropped calls I have every day is unreal. Our company has over 6700 service techs and than goodness they are dumping them. They have given the techs a choice of staying with Sprint or going with Verizon. I haven't heard or found a tech that wants to stay with Sprint.Sprint may offer a cheap price but don't be a sucker, pay the feww dollars extra and go with a better company.


RE: Why Stay?
By therealnickdanger on 5/13/2008 8:37:23 AM , Rating: 2
I guess I'm the odd man out here. I've had Sprint for over 10 years now. One time I thought about quitting in order to get a cooler phone (Razr at the time), but Sprint gave me 1000 anytime minutes, unlimited Internet and text, a free Samsung A900 (so much better than the Razr), and a $200 service credit... all for $40/month (not including my government discount which evens out the taxes/fees).

I rarely, if ever, get dropped calls, my coverage has been excellent from deep valleys to mountain summits. Customer service is excellent if you know to bypass the standard reps and speak directly to the retentions department. They have always been great to me. I have no reason to leave now that they are getting better an better phones like the HTC Touch and such...

BTW, I've been using the Skyfire Beta on my Touch for a little while now - it's freaking awesome!!! Assuming they can work out some kinks by version 1.0, it will be THE killer app for any Windows Mobile device.


Billing issues are what loses Customers
By sapiens74 on 5/12/2008 2:27:24 PM , Rating: 2
We had a 19k bill for almost a year that was an error on their part, and it took me talking to my Execs and my company to escalate this to the highest persons in Sprint to get it resolved

I spent several hours of wasted time to get them to fix it.

When they finally resolved it we canceled everything except a couple of broadband cards.




RE: Billing issues are what loses Customers
By FITCamaro on 5/12/2008 2:44:48 PM , Rating: 1
$19,000 dollars!!!! Holy crap! What did they think you went to India for a month and talk non-stop?


By YoshoMasaki on 5/13/2008 5:44:42 AM , Rating: 2
It happens more often than people think. O_O

http://consumerist.com/5007965/sprint-can-you-plea...


RE: Billing issues are what loses Customers
By rudy on 5/12/2008 3:10:56 PM , Rating: 2
Report to BBB, my sister did that and things were straitened out faster.

Sprint actually has good rates and good plans the problem is their customer service is terrible and their CEOs are just to stupid to understand that. They keep cutting wages and getting rid of their best employees when they need to keep those guys around. Secondly they need to be offering customers good deals to stay who are long and loyal customers without the customer needing to call in and threaten leaving to get it.