Sprint-Nextel Continues To Hemorrhage Customers [Despite HTC EVO 4G, WiMAX and Cheap Plans, Customers Flock From Sprint]

Sprint looked like it was in bad shape for the past few years. They excited a lot of people with their HTC EVO 4G and Sprint fans have often held up the company’s (small) WiMax 4G network as a positive sign, but Sprint-Nextel, one of the “Big Four” American mobile phone providers is continuing to lose customers according to to their earnings report.

In their first quarter for 2010, Sprint-Nextel lost a total of 75,000 customers and a whopping $865 million in revenue. While the loss of 75,000 customers may not seem that bad – they lost 578,000 customers who were paying long-term two-year contracts. That’s where all the money is for these guys. The 500,000 new customers were all new to Sprint’s prepaid service through their subsidiary – Boost Mobile. The loss of $865 million actually makes it pretty clear that they aren’t making much money on these Boost Mobile users.

Sprint is actually gaining a lot of these new Boost Mobile customers every quarter – but the problem for the company is that the ‘revenue per customer’ for a prepaid customer is a lot less than a traditional contract customer (which, if you’re seeking value and want to stick it to Sprint, go with prepaid).

Sprint-Nextel CEO Dan Hesse (who appears in a lot of commercials in the United States), tried to put a positive spin on the customer loss by saying that they’ve freed up some cash flow and that they’re continuing to improve brand recognition and customer service ratings. Their WiMAX network (which they love to promote as America’s first 4G network) is pretty small right now, but they’re expanding it and that’s likely a pretty expensive operation.

What’s the outlook in Sprint? As IntoMobile reports, they’ve offered their $70-monthly “Everything” plan which offers unlimited voice, data and texting. That plan actually forced T-Mobile US to do a similar plan called “Even More Plus”. In addition to their cheap plans, they’re also offering some great deals on phones, too. To go after the high-end technophiles (like you reading this blog), they’re offering lust-worthy phones like the HTC EVO 4G.

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  • Zee

    Nice garbage article, too bad it isn’t in print so I could let my dog pee on it. There is way too much negativity here. I have been on all 4 carriers and I must say the price vs coverage vs speed vs customer service give Sprint an easy win as number one. The coverage is second to big red around the east coast but no by much. WiMax isn’t as fast as LTE but is very close and it has been out for a while now and it is everywhere I go, yet again, on the east coast. If you want to bash a company then try out AT&T since they have some of the worst customer service I have ever had to deal with. Refusing to take responsibility for their own faults in their billing and service, not to mention the shotty service including massive dead zones and multiple dropped calls durring the same conversation….

    • Kevin Schram

      Huh?

      How did I bash Sprint? Everything I said was fact.

      #1 – They’re losing customers.
      #2 – They’re losing revenue
      #3 – Their WiMax network currently covers only a few cities.

      You need to get your eyes checked. If I wanted to write a hit piece on Sprint, I could do a lot better than this.

  • Informed

    You fail to mention Sprints customer loss has been cut in half, majority of those customer are form the Nextel side. Wimax may only be in 27 markets, where is Verizons 4G, At&t’s?? At&t is still struggling rolling out their 3G. With the launch of any Next Generation Cell Network, it is rolled out in spots. 3G was rolled out similarly.

  • GBatt

    I have been with Verizon (couldn’t get bill corrrect) AT&T (dropped calls) Sprint (originally poor customer service has improved lately, price can,t be beat and call quality is good. If people keep leaving I guess I will have all that 4G bandwidth to myself.

  • jc

    Ya I have to agree, you say customers flock “despite” evo 4g and wimax?? which #1 the Evo isnt even out yet so determine the flock of customers has any relation to that is completely wrong. maybe after the phone is out and mind you the FIRST 4g phone, if sprint is still losing customers you can say “despite”. Also sprint’s 4g network “small”, small compared to what? isnt sprint the only provider of the big 4 that even has 4g coverage. this article has some facts, but is very misleading and doesnt paint the proper factual picture of Sprint.

  • dk

    all i know is ive been a tmobile customer for 6 years..ever since i seen tmobile not try to pull out a new phone..with improved features ive always been wanting to leave tmobile when the right phone comes out..when i heard of the htc evo 4g..i knew that phone is for me but the only thing that is kinda preventing me to change to sprint…is all this bad things i hear about that mobile company..i hear the customer service is crap..which to tell you the truth it doesnt really matter to me..what i do mind about the company is that i hear that the coverage isnt that great and there phones sound isnt that good and all these things about people are leaving the company…its getting me to second guessing about ending my 2 year contract that i have with tmobile to go to sprint..and att is crap not worth it at all there customer service is the crappiest out there..i had them for 3 years for internet, tv, phone, cell phone and so on..and let me tell you the worst company i even chosen to have..i would go to verizon but there too damn expensive..

  • Brad in FL

    I’ve been with Sprint since 2003.

    I have never had issues. If I get a moron in Customer Service, I hang up and call back.

    They’ve replaced out of warranty phones for me with no insurance.

    They’ve given me 3 new (and latest models) phones when they screwed me out of a rebate.

    Sprint’s biggest failure is their advertising.

    Listen to the AT&T and Verizon commercials. They don’t mention Sprint, only each other. Why? Simple.

    Sprint DOES have the cheapest plan.

    Sprint has unlimited Mobile to Mobile, when most don’t. (granted, many have roll over.)

    Sprint needs a better advertising strategy. Random ideas off top of my head to grab people’s attention.

    Step one is to get the phone to market NOW – not June. The Incredible is out, soaking up most of the sun. And the new Apple iPhone will be out this summer as well.

    Step two. New ads.

    Commercial 1) Sprint user calls his friend who has AT&T/Verizon. They BS about sports, and before he hands up, Sprint caller looks at his phone, notes how long they’ve been on call, mentions it to his friend, but that it doesn’t matter since it didn’t go against his anytime minutes. Calls him back, for a 5 second quick question, and mentions minutes again. Calls 2 or 3 more friends on different carriers and does same thing. Or something to that effect.

    Commercial 2) 4G. Real world 4G demo not this computer animated crap on Google.

    Commercial 3) Price plan break down comparison. 30 Seconds of base plan, add ons, average taxes, fees = bottom line, between Sprint and Verizon and AT&T.

    Sprint needs to hit back. I’m sure Verizon has awesome service, and have had great phones for years.

    I am thrilled to see the EVO come to Sprint. I can’t wait. I’ve been a smart phone hold out forever, because I’ve wanted to stay with Sprint – and def never wanted to go with Apple.

  • Jon

    I was with CVerizon and was very happy with the performance. I switched to Sprint a few years ago and I am thrilled with how well everything works on the Sprint network. Not sure why everyone doesn’t switch. I pay 100 bucks a month (not including taxes) for EVERYTHING. No other carrier even comes close to that. I think it’s the phones. But when HTC EVO comes out watch what happens.

  • SN

    Mr. Schram,

    You didn’t quite bash Sprint, but you certainly (& deliberately?) misled.

    “Sprint Nextel reports first-quarter 2010 results
    04/28/2010
    • First sequential increase in total net operating revenues and wireless service revenues in nearly three years
    • Best year-over-year improvement in net post-paid subscriber results in five years
    • Consolidated Adjusted OIBDA and Adjusted OIBDA margin grew sequentially
    • Successful Assurance Wireless launch in five states; demonstrating strength of multi-brand prepaid strategy
    • Nine consecutive quarters of improvement in Customer Care Satisfaction and First Call Resolution

    Today, Sprint Nextel Corp. today reported first-quarter 2010 financial results. The company announced first quarter consolidated net operating revenues of approximately $8.1 billion, a net loss of $865 million, which includes a non-cash $365 million (12 cents per share) increase in valuation allowance on deferred tax assets resulting from net operating loss carryforwards generated during the first quarter, and a diluted loss per share of 29 cents. Excluding the increased valuation allowance on deferred tax assets, the diluted loss per share would have been 17 cents for the quarter. The company generated $506 million of Free Cash Flow in the quarter. As of March 31, 2010, Sprint had approximately $4.4 billion in cash, cash equivalents and short-term investments.

    Sprint lost a total of 75,000 net subscribers in the quarter. Driven by the best year-over-year improvement in post-paid gross subscriber additions and the highest prepaid gross subscriber additions in five years, the company achieved the best total company net subscriber results since the third quarter of 2007. Net post-paid subscriber losses improved year-over-year as the company lost 670,000 fewer subscribers than in the first quarter of 2009.”

    When the above is shown next to your facts, you will see that yours are not telling the whole truth.

    DK,
    Don’t be afraid of the Sprint horror stories you hear. Their name has become mud for various reasons (some earned, some not), but they are much improved over the years. I have no real complaints after being a customer for the past 10 years. They have the most economical plans & improved customer service. Calls on the Sprint network are far clearer than calls I receive from AT&T subscribers. I travel & have rarely, if ever, been let down by coverage (voice & 3G/EVDO data). By comparison, I have an AT&T phone for work & often struggle to download a few emails; while simultaneously tethering my Sprint phone to my laptop for streaming music. I don’t have any point of reference for Verizon or TMobile. I would like to see an objective comparison of Sprint’s coverage vs. Verizon, however.

    The only thing with Sprint is they are often slow to get the “it” phone of the moment (Razr, iphone), but they still have good phones if you are less concerned with image. Perhaps the Evo will change that as I see many people openly lusting after that device.

    • http://nexus404.com/Blog Andrew Tingle

      @ SN – ‘deliberately misled’? My team NEVER deliberately mislead anyone and I resent you even questioning any of my writers’ motives. Nevertheless, not withstanding that, I appreciate the scope of your comment and I’m sure Kevin will address the points you’ve raised in due course.

    • Kevin Schram

      I’m almost losing my patience on this issue. I work hard to get my facts straight and you lot are arguing apples while I’m arguing oranges.

      Page 4 of Sprint-Nextel’s earnings report, located here (http://investors.sprint.com/phoenix.zhtml?c=127149&p=irol-sec#6885822) says that Sprint lost net 75,000 customers, of which, included 578,000 contract customers. The difference is from prepaid customers. This is an undeniable fact, it’s printed in black and white on Sprint’s earnings report.

      Yes, Sprint lost 230,000 less customers than they had in previous quarters – but they still are losing customers, which was the point of my whole article.

      I was not trying to pass judgment on Sprint in any way. I thought I was fairly positive to Sprint, especially in the last paragraph. They have cheap phones, cheap plans, they’re pioneering 4G in the United States and they’re improving their customer service.

      • http://nexus404.com/Blog Andrew Tingle

        Thanks Kevin. I now consider this matter closed.

  • Nate

    @ Brad in FL

    I agree with you 100% I have been with Sprint since 2000 (my first cell phone). Not only do i believe sprint has the best plans but their customer service has gotten noticeably better over the past 2 years. The reason some people have problems with them is because THEY call them with an attitude all ready. I have had every issue (and I haven’t had many) resolved. Also since Sprint and Verizon are CDMA, ask for a free roaming plan, your phone will work EVERYWHERE a Verizon phone works!! A lot of people seem to miss that.

    Trust me I read a lot of articles on phone companies and the FACTS speak loudly. The only reason At&T is the number one provider is because of the iPhone exclusivity, period. Sprint has even gone as far as to offer the AirRave (a device that boosts a cell signal in your home via broadband connection) FREE if you are in a bad coverage area. As Brad stated if people knew these things there is no way people would just drop them. Sprint has to do better at the advertising. But at the same time i just i hope people will do more research before making the switch. The more you know…

    Peace