From Wall Street Journal.com Strong Handset Sales, Less Customer Turnover Help Push Up Stock By AMOL SHARMA and VISHESH KUMAR June 30, 2008 Struggling wireless carrier Sprint Nextel Corp. is showing some signs of life. Not only are investors expecting the company to show improvements in customer retention in the second quarter, but Sprint also is selling out of a new high-end handset in some retail stores. Sprint stock jumped 13% last week despite a heavy selloff in the overall market, after word circulated that Verizon Communications Inc. President Denny Strigl had told an investor meeting Monday that Sprint's performance had picked up in the past 30 days. Mr. Strigl added that the trend wasn't hurting the results of Verizon Wireless, a joint venture of Verizon Communications and Vodafone Group PLC. Meanwhile, Sprint's latest device, the Samsung Instinct, an iPhone look-alike that went on sale June 20, is doing well so far, the company says. Sprint shares, which were trading below $6 in March, closed up seven cents to $8.91 in 4 p.m. New York Stock Exchange composite trading Friday. Sprint Chief Executive Dan Hesse previously had told Wall Street to expect lower customer turnover after a dismal first quarter in which 2.45% of Sprint's valuable "post-paid" users -- those who pay monthly bills and sign service contracts -- defected to other carriers. Sprint lost 1.1 million customers in the quarter, leaving it with 52.8 million total subscribers. In 2007, Sprint, the No. 3 wireless carrier by subscribers, suffered huge subscriber defections, hurt by customer-service and marketing missteps. Analysts caution that Wall Street shouldn't bank on a quick turnaround. Sprint will continue to face stiff headwinds as it goes up against Verizon Wireless and AT&T Inc. for the dwindling number of U.S. consumers who don't have a cellphone. "The stock is reflecting that a turnaround has already happened, but there are real reasons to be cautious about how easy a turnaround will be to pull off," said Craig Moffett, an analyst at Sanford C. Bernstein. Mr. Hesse also must deal with some major strategic questions facing the company. He defused some concerns on Wall Street about the company's $5 billion plan to build a high-speed wireless network using WiMAX technology by forming a joint venture with several cable and technology companies to share costs on the project. Now Wall Street is wondering whether Sprint may sell part or all of the company. Deutsche Telekom AG has considered making a bid for the company, but nothing is on the drawing board, a person briefed on the matter said. Meanwhile, Sprint has evaluated whether to spin off or sell its Nextel unit, the source of most of the subscriber defections. One challenge in arranging such a deal -- besides finding a willing buyer for a network that has had major problems -- is structuring it so Sprint can shed more than $5 billion in debt, people familiar with the situation said. Mr. Hesse has reorganized the company to put a single executive, Danny Bowman, in charge of the Nextel unit, with John Garcia in charge of Sprint's other cellular unit. Mr. Hesse is making significant investments to retain Nextel users by offering them new handsets for use on the Sprint network that include the Nextel walkie-talkie feature. After testing the service, Credit Suisse analyst Chris Larsen said in a research note that he was generally impressed with the handsets. "It could free up Sprint to either monetize or decommission the Nextel network at some point in the future," he wrote. --Dana Cimilluca contributed to this article.
I Agree...So far to date Sprint's new WIMAX service has allready gained over 40,000 plus coustomers, an empressive number for a new emerging technology &, the Big reason is a portion of their subscribers can't get high speed internet, due to cable systems not being in their serviceable areas ( or have not upgraded to a fiber/ coaxial system ), & the telephone company in their area has not expanded their DSL service to their household...This is a BIG Plus for Sprint. Their making the first jump & I think this is a very smart move in order for them to make a come back in the wireless market...But the question still remains , what does Verizon have planned after they aquire Alltel ? We will see soon........
Finally, some good news floating around about Sprint. Seems like things are going much better. But then again, after you've hit rock bottom, the only way is up. On a serious note, I'm very very very pleased with my overall Sprint experience. I've been with uscc, verizon, cingular, tmobile, telcel, and sprint/nextel. So far, Sprint has been the best forme
I'm not surprised to hear this. I think that Sprint has taken more of a bad rap than they actually deserve and sooner or later people are going to realize that Sprint offers a good product and that you can't always believe all of the negative hype floating around. On a side note I bet Deutsche Telekom is regretting not making a bid sooner because now Sprint is less likely to sell and with the stock prices going up they would have to pay a lot more money for them now than they would have just a few months back.
Hesse is doing a good job and hopefully will keep the ball rolling. Do you notice that only almost everything it used to say Sprint together with Nextel, they have really restricted their use of both the names together. Even on Nascar you only see Sprint.
if Verizon and Alltel merge i wont have a problem with it a long as they do drop all the overlapping spectrum to other companies that could use it...........Metro is very promising......and USCC
I agree again. Sprint is taking a risk, & I think it is going to prove positive for them. And don't think Verizon don't relize that. remember if they do away with the 1900 Mhz frequency it will be much easier for them to deploy their new 4G service on thier allready lincensed 700 Mhz spectrum ( in referance to their all ready owned 800 Mhz, & Alltel's current 800 Mhz area ). But all in all Sprint is just like XM Radio, in a way. XM was to first provider to offer commerical free sattelite radio via sattelite coast to coast , and to have auto manufactures to include their service in vehicles just after inception. I can predict Sprint will be setting the standard when all is said & done. I still will give Sprint on a scale of 1 - 10 a Firm 10 + on their move, but only time will tell I presume...
i honestly stand strongly by Sprint because the Xohm brand is so open and generically available.......people can wholesale it and all different kinds of companies can use it for their customers.........cable companies in on the Xohm venture can offer their customers another internet option because not all people who have cable can get cable internet........the cable system might not be up to par......this is an oppurtunity.....and in the end......LTE is just another cellular technology.......locked up in contracts and cellular voice plans