News Column

Sprint reports profit despite subscriber losses, ponders price cuts

July 30, 2014

By Mark Davis, The Kansas City Star



July 30--Sprint Corp. reported a sliver of profits but more subscriber losses during the second quarter.

The company also is testing price cuts and new service plans that lack its highly promoted unlimited data feature, officials said during a conference call with analysts.

"We may need to make some adjustments to our pricing levels based on what we learn," chief executive Dan Hesse said.

Specifically, Hesse said the tests include plans with a metered data feature that charges more for using more data. Sprint's marketing emphasizes is unlimited data plans.

Hesse said an update is needed because rival carriers have announced pricing changes since Sprint launched its Framily discount plans early this year.

The $23 million profit equaled 1 cent per share and was a sharp improvement over the wireless phone company's $1.7 million loss a year ago.

Subscribers continued to disconnect from the Overland Park-based carrier, mostly because of service disruptions as Sprint replaced the old equipment in its wireless network.

Total subscribers declined by 334,000 to 54.6 million. A year ago, Sprint lost more than 2 million subscribers, mostly from an effort to recertify whether customers qualified for a federally supported phone program.

The work to upgrade the network is largely complete and Sprint is expanding coverage of its faster Sprint Spark service, which now is available in 27 markets.

Sprint's subscriber losses included a decline in customers under contract, which generate the most revenue per account, of 245,000. The company also shed 619,000 pre-paid customers who buy service month to month. Sprint reported an increase in its number of wholesale customers of 530,000.

Revenues in the quarter were just short of $8.8 billion, compare with nearly $8.9 billion in the quarter a year ago.

Sprint said its operations posted a profit of $519 million, its best showing in more than seven years. The total ignores some costs that reduced net income to the $23 million total.

To reach Mark Davis, call 816-234-4372 or send email to mdavis@kcstar.com. Follow him on Facebook and Twitter @mdkcstar.

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(c)2014 The Kansas City Star (Kansas City, Mo.)

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Source: Kansas City Star (MO)


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