When I'm having a bad day, I try to cheer myself up with a little game. I remind myself that I don't have to run a telecom company. Lots of debt, lots of regulation, and lots of competitors... now that's a bad combination.
But if you believe management, good things are on the way and it's only a matter of time before things turn around. CEO Gary Forsee, who took the helm in March, pledged to cut costs by 5% to 7%. He'll need to. Sprint's acquisition costs surged to $465 per customer from $396 last year, the highest among the top six telecom-providers.
The only bright spot is that Sprint now expects free cash flow of about $300 million for the year, up from its previous estimate of $200 million. There are also some promising sounds coming from other telecoms. Nextel
Still, I think it's bit premature to invest in the telecom sector. I'll wait to hear the ring of profits.
Brian R. Hook, publisher of BizBlip.com, can be reached by email at email@example.com.