Sprint

Final iDEN shutdown and Network Vision investments continue to hurt the bottom line

Sprint has posted its Q2 2013 earnings, and amidst a whole bunch of changes for the nation's third-largest carrier it has a big of a mixed bag in terms of earnings. Here are the highlights for Sprint this quarter:

  • $8.87 billion operating revenues, up slightly year-over-year
  • $1.6 billion net loss and $874 operating loss for the quarter
  • $7.2 billion in wireless service revenue, up 8-percent y-o-y
  • Record high postpaid ARPU of $64.20
  • Net postpaid subscriber additions for the 13th consecutive quarter

In terms of income, it's just more of the same for Sprint -- big losses and basically stable revenues quarter-over-quarter. Much of the losses can be attributed to extra costs with its Network Vision projects and shutdown of the iDEN network, but in the end Sprint just isn't pulling in enough revenue to be profitable and it's far from that break-even point.

As for that Network Vision project that they are spending so much money on, Sprint says that it now has LTE in 151 cities nationwide. To date more than 20,000 network sites are on air with the new improvements, and Sprint expects to cover 200 million people with LTE by the end of 2013.

While it added postpaid customers for the 13th quarter in a row, Sprint's overall customer numbers dropped due to the final loss of Nextel customers and slight dips in prepaid and wholesale customers. Luckily Sprint's gains are in the customers it earns the most from, now at an ARPU (Average Revenue Per User) of $64.20.

Financials for the quarter aside, Sprint is happy to announce that it has closed its sale to SoftBank, its transaction to buy Clearwire as well as its purchase of spectrum from U.S. Cellular. After this long road of fluctuating circumstances, Sprint is hoping to get back on its feet to challenge the other three big carriers and gain some subscribers.

Source: Sprint

 
There are 26 comments

Kinglo says:

bit of a mixed bag?

I honestly expected these results this quarter with the whole IDEN shutdown and just the pattern of the last couple years. I honestly don't expect sprint to have a decent quarter not until next year once they have LTE on 800/ and 2.5 ghz and being close to done with their 3G enhancements.

Sprint still has a long road ahead of them but they will make a comeback since they are under softbank which will utilize clearwire's spectrum and softbank's CEO is determined to make sprint highly competitive against their rivals. The general public just needs to understand that sprint is changing it's entire network like going from windows 95 to windows 8.

As a sprint it's frustrating but I know good things are coming.

bigtank says:

I agree. I just cant wait till the major upgrades are done. I think I'll hold off buying a new device till next Summer when the LTE 800 and Clearwire bands are built in

Same. I'm eligible for an upgrade in June 2014 so it's perfect because they will already have LTE on 800 and 2.5 in most major markets. Already some markets such as Denver, Seattle, New York, and a few more has clearwire LTE turned on. Of course it's still in testing but you're able to pick it up once you have a Triband device.

Plus turning on LTE 800 only requires a new carrier card, and a software update on sprints end so it won't take years for them to deploy LTE on that band lol.

droidhead_1 says:

I've been eligible for a month on 2 lines but I'm waiting my contract out. Going to T-Mobile in Nov. Network vision was started in Chicago right after I joined and data is still crap. I understand its going to get better but T-Mobile is already great and they rolled out LTE super fast to an already great network. My friend's H+ is faster then my LTE! After the new plan were announced I went in and for the 3 lines I currently have my bill will go up $43! That made my decision much easier as T-Mobile will save me $ even with phone installments.

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I've contemplated to switch to tmobile as well but their network is not great where I live (Western Maryland). I plan to move back to the DC metro area sometime next year which is when my contract ends with sprint. Hopefully a good amount of LTE (LTE on 800 and 2.5) is deployed in the DC metro area before my contract ends. I have LTE right now in Western MD and the speeds varies between 4-21 Mbps down and 2-4 up and my area has voice on 800 smr so overall my service is great but when I get closer to the city (Frederick, MD, Montgomery county) my coverage is limited but I get LTE in some parts in the city.

Sprint now has all the tools and resources to build a superior 4G LTE network against its rivals but it takes time. I give them credit that they are refarming their whole network now so when the masses introduce LTE advance they don't have to rebuild their network to support it. Their network vision equipment is LTE advance ready. Plus sprint and tmobile will have first dibs at the 600mhz auction which is great for the both of them.

buffdaddy72 says:

Yeah same here. My contract is up in June so hopefully things will be much better by then. Sprint will probably be taking these financial hits for the foreseeable future. But with Softbank now calling the shots hopefully they can minimize the damage.

I know it's fashionable nowadays to knock Sprint (while gushing over TMO). But with the Softbank merger and acquisition of Clearwire, all this spectrum Sprint is now sitting on, shutting down Nextel and the slow but steady Network Vision deployment. Sprint has nowhere to go but up, and up in a big way.

stergmi says:

Windows 8 isn't exactly a selling point to the general public either.

yankeesusa says:

Well, I still think that things are gonna keep getting worse. although I now have lte in my town I only hit it 30% of the time. The other time my 3g is as slow as dialup. Ive been testing tmobile and tmobile is great here. If I wasn't under contract I would have swithced 3 months ago. On average with tmobile my phone hit 8-12mbps and on slow days it never went under 4mbps. Even on lte my sprint phone never went above 8mbps and on 3g is stayed at .04 mbps. Its sad. Not to mention the tmobile phone always worked indoors. Too bad I can't pay for 2 services. Had to keep the one with the contract etf.

droidhead_1 says:

I'm in the same boat. Only 3 months more and it can't come fast enough. I wish it was now so I can get one JUMP! Grab a Xperia Z then the Note 3 in the fall.

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marisdaman says:

@3 months left you buyout should be small.

droidhead_1 says:

$300

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Gekko says:

why so much? multiple phones?

sprint etf at 3 months for one smartphone is only $100.

droidhead_1 says:

3 lines. Etf is never less then $100 a line

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droidhead_1 says:

Sad to think that wimax is just as good as their LTE in Chicago..

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ReaganDee says:

I would sadly love to have wimax on my HTC 4G LTE in Houston. We were one of the first markets to get LTE for Sprint and it is still super spotty at best and 3G is almost unusable.

decke003 says:

It probably has more to do with your phone than the network. It was a night and day difference for me when I sold my EVO LTE and picked up a Note 2.

The EVO LTE is absolutely horrid at picking up LTE.

OmarF82 says:

They reported the highest revenue and subtract 1.6 billion for Nextel shutdown. Still gain.

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And not to mention they won't be spending millions/billions on keeping Nextel running anymore.

The Nextel shutdown only cost them ~$620 million this quarter, not $1.6 billion. Record revenues are nice, but they still need to be several hundred million dollars higher every quarter for sprint to be profitable.

Look back through Sprints earnings and you'll see this is the same deal over and over again. This isn't the first loss this big in recent quarters.

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Gekko says:

i'm gone to GSM when the new Next Nexus comes out!

droidhead_1 says:

+1000000

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SoCalBIGmike says:

There is no such thing as "GSM" anymore. UMTS & WCDMA are the backbone of modern networks. AT&T and T-Mobile use Qualcomm CDMA tech in ALL of their devices and infrastructure. Its just not what you think.

ro1224 says:

With all this talk about Network Vision I'm still wondering why I have 3G data rates of 0.21Mbps down and 0.37 Mbps up and no 4G (OK, rural location that may never get 4G) and Sprint HQ tells me that Network Vision is complete in my area. If those data rates are what a completed NV project delivers, Sprint and Softbank should give up now.

droidhead_1 says:

That the reason I'm leaving. I was in the 2nd phase of NV, LTE is nice when it's there but 3g is still awful. Can't even steam from music play on low quality off Google music in 3g! When I call sprint they blow smoke, telling me I'm in one of the best coverage areas in the country.. Sad sad sad....

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CharlieTX says:

Sprint's bottom-feeder strategy has finally caught up with itself. Sort of OK coverage, sort of OK service, etc., it all works in the face of lower competition. But, now that Verizon and AT&T are so big and have good coverage and OK service, Sprint is having a hard time turning profits.