Sprint Surprises With Customer Adds in Q4 2014 as T-Mobile Bid Looms
February 11, 2014 9:56 AM
comment(s) - last by
America's third largest carrier finally caught a break
By the looks of Sprint Corp.'s (
, the positive influence of Sprint's new
, Japan's Softbank Corp. (
) may be taking hold. Sprint shares are up 7.5+ percent in early trading on account of the good news.
I. Customer Gain is Happy Surprise
won a bidding war
for America's third largest carrier, and closed the 80 percent stake purchase in early July. But in Q3 2014, Sprint showed
few signs of change
, posting accounts of customer defections and monetary losses that have become unfortunately expected from Sprint in recent years.
But just announced results for Q4 2013 earnings showed a remarkable shift.
by Thomson Reuters I/B/E/S
were generally gloomy coming in, predicting anywhere from 48,000 to 400,000 net customer losses, with an average expectation of 83,500 net losses. Instead Sprint not only cut down on the 400,000 net customer loss of Q3, it reversed it altogether, unexpectedly adding 58,000 net postpaid subscribers.
Sprint is spending big on its LTE rollout, but appears to be turning the corner on subscriptions and earnings. [Source: Sun Journal]
That figure is for the "Sprint platform", which includes subscribers to the recently acquired Clearwire and U.S. Cellular networks. Counting only Sprint's own branded postpaid network, Sprint did see a small loss of 69,000 customers, but that was substantially better than the average expectation of 371,000 subscribers that eight analysts
predicted, on average.
Including postpaid subscribers on all its platforms -- including tablets and prepaid customers -- Sprint saw 682,000 net customer additions. Sprint says it added 466,000 tablet customers during the quarter.
Softbank CEO Masayoshi Son (left) and Sprint CEO Dan Hesse [Image Source: Kyoto Newscom]
Sprint CEO Dan Hesse remarks:
In 2013 Adjusted EBITDA* and Sprint platform wireless revenues grew significantly while we made investments to improve network performance and expand 4G LTE to more than 200 million people. As we roll out Sprint SparkTM and create innovative offers like Sprint FramilySM, we are building a foundation for future success.
Sprint cut churn -- a measure of customers defection rates -- on both its prepaid and postpaid platforms. The carrier ended the quarter with over 55 million subscribers.
II. Losses Narrow, Even as Sprint Spends Big in LTE Race
Revenue came in at $9.14B USD, with average revenue per user (ARPU) of $64.07 USD/user. That was up from $9.01B USD a quarter ago. The revenue numbers beat average analyst expectations of $8.97B USD and $8.99B USD from Thomson Reuters I/B/E/S and
, respectively. And the ARPU was slightly better than the $64.01 the
surveyed analysts predicted, on average.
Sprint still did lose $1.038B USD for the quarter. That's up from the $699M USD it lost in Q3, but it trims the $1.321B USD net loss of a year ago. The Thomson Reuters I/B/E/S surveyed analysts predicted an average net loss of $1.317B USD.
Coverage-wise, Sprint did improve its network modestly, growing its LTE coverage to 200 million Americans. Sprint now covers most urban areas in the U.S., but trails the coverage of top U.S. carrier Verizon Wireless (a subsidiary of Verizon Inc. (
)). In January Sprint wrote that it hopes to cover 250 million Americans -- or just under five out of every six Americans -- by "mid-2014".
Sprint's Spark program is bringing advanced LTE technology to select U.S. markets.
its advanced LTE efforts with "Spark", a new high-speed cellular data service that debuted in 11 initial markets in mid-January:
Fort Lauderdale, Fla.
Fort Worth, Texas
San Antonio, Texas
Spark offered peak data downlink speeds of 50-60 Megabits per second (Mbps). The carrier plans to gradually add Spark services in more markets, but it will be a slow process, as serious infrastructure upgrades are needed. Sprint also says its eventual goal is to reach peak network speeds of around 2 Gigabits per second (Gbps) -- roughly 40 times current peak Spark speeds. In October, Sprint demoed a 1 Gbps connection at its labs.
The carrier will spend $16B USD over the next two years -- including an estimated $8B USD this year -- to expand its LTE coverage and improve its nationwide infrastructure to compete with Verizon and second-place AT&T Inc. (
III. T-Mobile Deal in Jeopardy
In terms of plans Sprint pleased customers with its
new "Framily" plans
, which offered pooled discounts for friends and family, with separate bills for each member.
However, it also upset some subscribers,
cutting its "One Up" early phone upgrade program
only one quarter
. That cut just landed in January so it remains to be seen if it allows T-Mobile USA -- America's fourth largest carrier -- to steal some of Sprint's newfound momentum. T-Mobile was the first major carrier to
unveil an early upgrades plan
for its smartphone users.
Speaking of T-Mobile, all eyes will be on Sprint and its majority owner Softbank, who are reportedly contemplating a bid for T-Mobile USA, a move to merge the nation's third and fourth largest carrier, leaving only three large carriers in the U.S. mobile market. T-Mobile USA owner Deutsche Telekom AG (
expressed interest in selling
its now profitable and thriving subsidiary, but regulators have suggested that they may file lawsuits to block a purchase by Sprint.
Softbank's plan to get rid of the "uncarrier" (T-Mobile) hit a roadblock last month.
[Image Source: Flickr (top); Getty Images (bottom)]
Last month Sprint CEO Dan Hesse and Softbank CEO Masayoshi Son met with
U.S. Federal Communications Commissions
(FCC) regulators to try to sell them on the plan. But reportedly the meeting did not go well, leaving the prospect of a bid uncertain.
Given Sprint's decision to kill early upgrades T-Mobile USA customers may not be too disappointed at that news.
This article is over a month old, voting and posting comments is disabled
RE: Long term goals
2/12/2014 12:13:23 PM
Sprint is horrible i can't wait til june when my etf goes down to 100.00 so i can go to T-mobile. My brother's T-mo gs4 gets great speeds and usually nothing less than regular 4g in south orange county and north county san diego. My sprint phone gets the occasional lte but usually only 3g which is unusable. I hope sprint doesn't buy t-mo so they can kill off the jump program.
RE: Long term goals
2/12/2014 1:20:58 PM
T-Mobile will pay your ETF fees up to $350 a line if you switch over. You may want to check with your local T-mobile vendor to see what is available for you.
"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs
Sprint Kills "One Up" Early Upgrade Program After Only Four Months
January 13, 2014, 9:05 AM
Sprint "Framily Plan": More Members, More Savings
January 8, 2014, 9:52 AM
Report: Fusion Fail? Softbank Wants to Merge Sprint and T-Mobile
December 15, 2013, 6:12 PM
Sprint Loses 313,000 Total Subscribers, Posts a Net Profit and Operating Loss
October 30, 2013, 12:17 PM
Sprint to Unveil "One Up" Early Upgrade Plan on September 20
September 16, 2013, 9:47 AM
Xbox One's Release Date in China Set for September 23
July 30, 2014, 1:15 PM
Chinese OEM KingSing Launches $99 Windows 8.1 Tablet with 3G Connectivity
July 30, 2014, 11:04 AM
Samsung Sees Decline in Share, Shipments in a Growing Smartphone Market
July 30, 2014, 9:43 AM
UK Drivers Must Now Give Their Cell Phones to Police After a Crash
July 29, 2014, 4:37 PM
Ford to Switch 3,300 Employees from BlackBerries to Apple iPhones by Year's End
July 29, 2014, 2:08 PM
Quick Note: Hilton Hotels to Use Smartphones as Room Keys, for Check-In/Check-Out
July 29, 2014, 12:53 PM
Most Popular Articles
Facebook Will Force Android, iOS Users to Use Messenger App This Week
July 29, 2014, 11:26 AM
Sony's Xperia Z3 Gets Detailed in Leaked Photos
July 25, 2014, 2:30 PM
Ford's Extensive Use of Aluminum in '15 F-150 Results in $395 Increase for Base Models
July 28, 2014, 3:02 PM
Report: Apple to Launch 12" Retina MacBook Air, 4K Desktop Product Later this Year
July 24, 2014, 4:33 AM
Pentagon's Priciest Project, F-35, Misses International Debut
July 25, 2014, 10:18 AM
Latest Blog Posts
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information