Sprint: Tourniquet, Please…
by John Paczkowski
Posted on November 7, 2008 at 12:15 PM PT
Discussing the latest in Sprint Nextel’s sad little parade of earnings announcements with analysts this morning, CEO Dan Hesse said the company has “yet to turn the corner” on the road to recovery.
Looking over the company’s financials today, I’d say the corner to which he refers isn’t even in sight yet. If anything, Sprint (S) appears to be heading down one of those bleak midwestern straightaways–in this case, jammed with the traffic of its fleeing subscribers. In its third quarter, Sprint Nextel failed to even meet Wall Street’s much diminished expectations. It reported an operating loss of $326 million, pushing its net losses to more than $1.1 billion for the year.
Worse, the company said it lost 1.3 million customers in the third quarter. And that is truly ugly news for Sprint, which has been hemorrhaging subscribers like Dan Ackroyd’s exsanguinating Julia Child. In the past two years, the carrier has lost almost four million customers. And try as it might to reverse that trend, it seems destined only to shed more. Being ranked as the carrier with the lowest customer satisfaction in a survey by J.D. Power & Associates isn’t exactly going to send new subscribers flocking to Sprint.
“Sprint, at this point, is clearly a show-me story, and I’d like to see tangible evidence that the company is successfully executing,” Stanford Group analyst Michael Nelson told Bloomberg. “We’re not willing to give them the benefit of the doubt.”
Shares of Sprint are plumbing the lower depths at $3.30 as I write this, down 10.33 percent.
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Comments
Hey, John. Before you post incorrect and outdated information about Sprint and J.D. Power surveys, you might want to do a little research.
J.D. Power officially issued the results of its 2008 Wireless Call Quality Performance Study – Vol. 2 on Sept. 4. Nearly 23,000 wireless users were surveyed from February to June of 2008 and Sprint was recognized for call quality, taking first place in the Southwest Region, tying with Verizon, and moving up from a previous last-place ranking. We also improved our ranking slightly in the North Central and West regions and we were above average or near industry average in five of six regions.
Posted by Conrad Sands at November 7th, 2008 at 1:55 pmConrad …
My information is not outdated, nor is it incorrect. According to the Powers report on which I based my post, Sprint ranked last, or below average, in four of the six geographic regions the firm surveyed. It received average marks in another and did quite well in the Southwest (progress!). Here’s the breakdown of Sprint’s scores pulled directly from the report:
Northeast Region: 2 out of 5 points (Below Average)
Mid-Atlantic Region: 2 out of 5 points (Below Average)
Southeast Region: 2 out of 5 points (Below Average)
North Central Region: 2 out of 5 points (Below Average)
Southwest Region: 5 out of 5 points(Among the best)
West Region: 3 out of 5 points (Average)
I really don’t think last or below average — sorry, “near industry average,” as you prefer to say — in four out of six regions is anything to brag about.
Posted by John Paczkowski at November 7th, 2008 at 2:30 pmMy wife and I are just one of Sprint’s repeated customers (since 00) and to tell you the truth, in 2006-07 and early 08 the customer service was horrible, not to mention the bill every month. I was calling and complaining every month and holding on the line forever to get a customer service rep.
BUT, now that I am on the everything plan with my new palm treo, I am as happy as a lark. I had a tech issue the other day, and it was resolved immediatly. Then to top it off, I got 3 calls that same day asking if my problem was resolved and how the service was that I received.
I was going to leave Sprint to Verizon about 6 months ago, but I plan on staying now. Very happy with service here in Richmond VA.
Ps. Keep up the good work Mr. Hesse
Note: If you want to talk about poor customer service, lets look at Verizon. Plus, I am sure most of those subscribers left Sprint because Verizon has that bundle with cable, internet, land line and cell. At least here in the Richmond VA market.
Maybe Sprint could get into the home cable and internet business also. Could do some damage.
Posted by Robert Norton at November 7th, 2008 at 6:09 pmwhat is the best case scenario for a company like sprint. like, if you were the CEO what would you do. seriously. i’m just asking.
Posted by irina slutsky at November 8th, 2008 at 12:27 am