Sprint's fourth quarter and year-end results met analysts' expectations with modest growth and a promise to turn around its lagging iDEN network. Here's how it breaks down:
Churn and Sub Growth: The carrier ended the year well behind the top two carriers with 53.1 million customers, after a painful loss of 306,000 post-paid subscribers. The CDMA, MVNO and Boost users saw subscriber gains in Q4, while iDEN users continued to decline. The total churn rate came to 2.3 percent. CEO Gary Forsee said CDMA users' churn rate dropped to historically low levels because of increasing network quality. Analysts estimate that Sprint lost about 750,000 former Nextel subscribers so far.
ARPU: Average revenue per user was down 1 percent quarter-on-quarter or 4.6 percent year-over-year at $60. Data revenue, however, rose 66 percent to $8.75 in Q4. Boost's ARPU was slightly more than $32. iDEN ARPU came in below $4. Annualized wireless data revenue totaled an impressive $4.4 billion.
Revenue, Income and Media Spending: Sprint met its revenue goals with $41 billion thanks to returns from its acquisitions and solid growth from Boost. Q4 net income totaled $261 million, up from $197 million a year ago. The carrier also plans to spend $200 million more on advertising this year to highlight its networks' capabilities, including PowerVision and push-to-talk applications. It will also increase business-related spending by 25 percent.
Cuts: The carrier's previously announced job cuts (5,000) are set to be carried out by the first of April. The carrier is also closing an additional 300 retail locations and kiosks after closing 260 such locations in 2006. The move will eliminate nearly 1 million additional cubic space of real estate in 2007.
Network Spending: In 2006 Sprint spent $5.9 billion on its networks. This year the carrier plans to spend $7.2 billion with $5.4 billion going to CDMA and iDEN and $800 million going toward its WiMAX network buildout. The carrier also plans to increase its 75 Rev. A pops to 200 by year end. Sprint has no interest in participating in the 700 MHz auction at this time.
For more on Sprint's Q4 and year-end review:
- see this article from the WSJ (sub. req.)