With Sprint Nextel
Revenue for the first quarter of 2008 drifted down by 8% to $9.3 billion, again driven by declines in the wireless business, where Sprint is struggling to keep Nextel customers happy. And although the company has been reducing expenses, those efforts still aren't enough to get the bottom line back in black: Sprint Nextel lost $505 million this quarter, more than double the $211 million net loss it reported last year
Sprint Nextel lost a whopping 1.09 million net subscribers in the quarter, as 2.45% of its most lucrative post-paid base churned away to alternative wireless providers such as AT&T
The market took the ugliness in stride, however, because the bigger cat had come out of the bag last week -- the deal to offload Sprint Nextel's WiMAX efforts into a new consortium under Clearwire
Investors were clearly enthusiastic about the news that Sprint Nextel's Xohm division and its vast spectrum assets would be dedicated to the new Clearwire consortium. Now CEO Dan Hesse will have an improved ability to address the company's core issues, especially customer churn. If Hesse can slow the exodus of high-end customers, trends in declining average revenue per user will reverse, and profitability will turn north again. The company's new Instinct product, which is due to launch in June, and some aggressive unlimited plans may be the impetus that gets the wireless business going in the right direction again.
Outside all of the rumor, hope, and hype surrounding Sprint Nextel, shares still warrant a look at this level. The turnaround has a long way to go, and significant risks remain, but all of the problems are fixable.
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