Sprint Hopes for Brighter Future After Nextel Shutdown
Sprint is hoping for a better second half of the year, following the June 30 shutdown of its Nextel network, but it still faces issues related to that closure “that will impact the second half of the year,” Sprint CEO Dan Hesse said Tuesday during a conference call. Sprint lost a net 2 million subscribers during Q2, which it said was mainly due to the Nextel shutdown; the carrier lost a net 560,000 subscribers during Q1. More than 1.3 million customers were still on the Nextel network at the beginning of Q2 -- 465,000 joined Sprint’s network before the Nextel shutdown, Sprint said. The carrier had 53.4 million subscribers at the end of the quarter. Sprint expects to see fewer gross subscriber additions during Q3 than during the same period last year due to deployment of its Network Vision network upgrade program, Hesse said.
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Sprint also blamed much of its $1.6 billion net loss during the quarter on the shutdown; it lost a net $1.4 billion during the same period last year. The carrier’s revenue rose during the quarter to nearly $8.88 billion, up from the $8.84 billion a year ago. Of that, $7.2 billion was from Sprint’s wireless services, with the average customer’s monthly bill during the quarter rising to $64.20, from $63.38 during the same period last year.
Sprint hopes its fortunes will improve following SoftBank’s buy of 78 percent of Sprint and Sprint’s buyout of Clearwire. SoftBank CEO Masayoshi Son said during a separate conference call Tuesday that SoftBank plans to “improve” Sprint in terms of its network, devices, branding, service and cost synergies, said New Street Research analyst Kirk Boodry in an email to investors. SoftBank plans to locate an office in Silicon Valley that will focus on “procurement, network testing, software development and collaboration with local companies,” which Son will visit once a month, Boodry said.
The SoftBank and Clearwire deals will help Sprint accelerate deployment of the Network Vision program, Hesse said. The carrier has completed upgrades on 20,000 cell sites through the Network Vision program, which is meant to upgrade Sprint’s network to handle 4G LTE. The LTE network expanded to 41 additional markets during Q2, now covering 151 markets, Hesse said. Sprint is working on upgrades to sites in 600 cities, with at least initial zoning work completed at 35,000 sites, said Steve Elfman, Sprint’s head of network operations. The carrier’s LTE network should cover an area with a potential 200 million customers by the end of the year, he said.
The upgrade program is being aided by Sprint’s Clearwire buyout and its $480 million purchase of PCS spectrum from U.S. Cellular in Chicago, St. Louis and other Midwest markets, Elfman said. “We've already begun to deploy capacity using the acquired spectrum and we'll continue to do so through” Q3 of 2014, he said. Sprint has been “actively engaged” in work to integrate Clearwire’s network into Sprint’s, Elfman said. Clearwire had about 2,000 TD/LTE sites commissioned at the time Sprint closed its buyout deal; Sprint plans to use those sites to expand its LTE network onto its 2.5 GHz spectrum. Those sites, along with additional sites under construction, should go on air during the second half of Q2, Elfman said.