Sprint Records $1.6 Billion Loss And Drop In Subscriber Base

Sprint Records $1.6 Billion Loss And Drop In Subscriber Base

Sprint recently reported a net loss of around $1.6 billion and a reduction of its subscriber base by two million, which may look discouraging for the mobile service provider. However, the company may receive additional capital and expertise following its acquisition by SoftBank, a Japan-based mobile service provider.

The loss was based on a quarter when the company operated two separate networks that were not compatible with each other. The Nextel network was closed to eliminate the distraction, expenses and reason for switching for its subscribers.

The $1.6 billion loss was equivalent to around $0.53 per share, which is higher than the $0.46 loss per share last year. The closing of Nextel resulted to a write-off of the assets of Nextel amounting to $430 million and $630 million worth of non-cash charges.

Revenues of the company increased slightly at around $8.88 billion, which was higher than the forecast of analysts that averaged at $8.73 billion.

Verizon and AT&T are currently working in expanding their markets even as Sprint is currently working on its turnaround. The strength of mobile service providers is determined by their network strength. Sprint is trying to catch up with its competitors in the deployment of 4G LTE connectivity.

Much of the subscriber loss was from Nextel, which lost around 1.3 million clients. However, the wholesale ad prepaid businesses of Sprint have also incurred losses. The core service of the company remains negative.

Despite the losses, the company indicated that its average revenue for each user increased. A 4.4 percent increase in the average revenue for its contract business was noted. On the other hand, revenue for its prepaid business increased by 1.6 percent.

Capital expenditure of the company for the year is expected to reach $8 billion. A conference call was set to be held by Sprint to provide the details of its current financial status.

Posted by James Fried on Wednesday July 31 2013, 6:00 AM EST. Ref: CNET. Link. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0