Subscriber growth and financial performance go hand in hand for wireless carriers. Regardless of ARPU (Average Revenue Per User) rates or data traffic, a carrier’s subscriber counts and, more importantly, it’s subscriber growth are the yard-sticks with which to gauge the company’s fiscal performance. So, it’s no wonder that wireless carriers with huge net subscriber losses tend to post dismal financial earnings.
Such is the case with Sprint. Continuing on a bad year rife with subscriber defections and profit losses, Sprint has again announced another losing quarter. This time around, Sprint has posted a net loss of $326 million in Q3 2008, riding on the back of a net subscriber loss of a whopping 1.3 million customers. Compared to a net profit of $63 million in the year-ago quarter, Sprint’s financial misfortunes are mounting.
Sprint saw its Q3 2008 turnover rate hit 2.15%, which is an improvement from the 2.3% it saw in Q3 2007. Interestingly, Sprint saw 1.3 million more subscribers leaving their network than were signing on as new customers while rivals AT&T and Verizon added millions of new subscribers.
The company said that it expects subscriber defections to stabilize in the fourth quarter, but CEO Dan Hesse points out that turning Sprint’s business around will take some time.
In time, Sprint’s WiMAX-based XOHM network may help bring Sprint’s bottom line back into profitable territory.