Sprint Nextel continues to bleed customers

Sprint Nextel subscribers continue to jump ship, as the company's sales decline and losses widen.

The company has been struggling for several quarters as customers have complained of poor service, especially from its Nextel division. Sprint bought Nextel for $35 billion in 2005, and the merger has largely been a failure, costing the company billions of dollars to integrate while causing the company to also lose millions of newly dissatisfied customers. Many Nextel customers have complained of poor service and a lack of handset choices.

Investors have been pushing the company to sell assets and focus on its core cell phone business. Recently, the company has been rumored to be in talks to sell its Nextel division. And last week, it announced would spin off its next-generation WiMax network in a joint venture that includes six other companies.

CEO Dan Hesse wouldn't comment on rumors that the company is thinking about dumping Nextel, but he acknowledged that Sprint has considered selling some assets. He said a spin-off of Nextel assets would involve "significant complexities."

The company lost $505 million for the quarter, compared to a loss of $211 million a year earlier. In February, the company announced a whopping $29.5 billion loss for the fourth quarter. This was due to the write-down of most of the assets from the Nextel merger.

Revenue in the first quarter also fell 7.5 percent, to $9.33 billion.

Sprint continued to lose customers in the first quarter, with about 1.1 million "post paid" subscribers, or customers who pay a monthly bill for service, ditching the service. This is compared to 1.07 million post-paid customers who left in the fourth quarter and a loss of 1.2 million customers in all of 2007. Hesse had warned in February that Sprint expected to lose about 1.2 million customers in the first quarter.

Sprint also lost about 543,000 prepaid customers, or customers who pay for service in advance. On the flipside, the company gained 343,000 customers through its youth-oriented brand, Boost. And it gained 183,000 subscribers from carriers that wholesale its network.

In total, Sprint now has 52.8 million subscribers.

The company's churn rate, or the rate at which people cancel its service, increased to 2.45 percent from 2.3 percent last quarter.

Meanwhile, Sprint's competitors have been adding customers. AT&T added 1.3 million wireless subscribers during the first quarter. And Verizon Wireless gained 1.5 million customers.

Despite the disappointing quarter, Hesse tried to remain positive. During the fourth-quarter earnings call, he had said it would take several quarters for Sprint to recover. And while the company is still clearly a long way away from a full recovery, Hesse said he sees "improved profitability in the long term."

The company is taking initiatives to get back on track. It is using its new "Simply Everything" service plan to help retain customers. This plan offers unlimited voice, data, text messaging, and Web surfing for $99.99 a month. Hesse wouldn't divulge specifics, but he said during the call that the plan is selling better than expected and has helped keep some customers.

Hesse is also continuing to cut costs. The company expects to lay off 4,000 workers. It also plans to close some retail stores.

[JFKinDC]

Woohoo! Consumers are the winners! Sprint customer service was HORRIBLE! My entire extended family left them in frustration. I hope there is a class action suit against Sprint over the early termination fees. If the service provider is crap they should be considered in violation of the user agreement and unable to charge the fees if you jump ship.

[AllenHarkleroad]

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[AllenHarkleroad]

Sprint overcharged my small (US) company for over $50,000.00. We caught them doing it and now they refuse to refund the over-payments. You can read the full story at http://www.sprint-really-sucks.com

[bonehead40]

I bought two phones from a mall sprint store and told the salesman I only wanted a 1 yr. contract. He showed me phones and I agreed on two different models-one for me and one for my wife. He wrote up the contracts and said " If your wife doesn't like this one, you have seven days to exchange it at no charge". Two days later we both walk into the store and told him that she didn't like the phone I gave her (for mothers day) and he kindly exchanged it for another-we paid another activation fee. After 1 year I cancelled and bought phones through Verizon and now Sprint is charging me for two early termination fees of 200.00 each. I called SPRINT and was on the phone for 32 minutes for some teenage wage loser to tell me that when I exchanged my wifes phone, my contract automatically turned into a two year contract. I told the lack of customer service rep that I was never informed of the change and he said I should have known.HE'S RIGHT! I should have known that the sales guy f*cked me in the *ss! I got that pounding sensation as soon as I headed out the door of the SPRINT store. Needless to say, they can have their lousy *ss phones, thier sorry *ss cuss-tomer service, and I hope they all enjoy thier short lived suck-cess. I love my Verizon service and would tell anyone considering SPRINT, to sit on a rusty anchor and tell them that SPRINT feels much worse. I just sent a letter to the NJ Attorny's Office and hope to file a class action suit. They are the worst I have ever dealt with.

[benjaminstraight]

Not surprising.

[athaus]

I am a sprint customer and i have to say that they have seriously slipped in service over the last 3 years, this last year i renewed my contract the sales rep sold me the simply everything plan for my 6 lines at a very good discount, i was very happy with the plan for the 3 months i had it then i got a call from sprint telling me i had to either cancel or change my plan cause they made a mistake and shouldnt have sold me the plan at such a discount ...

it took me 6 months to iron out all the errors sprint made in the contract they changed my plan without ever consulting me to a plan that didnt have anything close to what i had agreed to and was costing me a ton of money in comparison to what i had the only reason i even got the problem sorted out is because i kept following up to get it right and to top everything off when i renewed my contract half the phones they sent me were broken (their insurance company is a joke)

now that i got the problems sorted out after spending aprox 40 hours on the phone over 6 months they told me that they would not compensate me in anyway for the time i had to spend for the mistake that they made (i asked them for a treo pro at no charge and they offered me the same discounts i was already eligible for and tried to make me feel like i was getting a deal) i personally cant wait for my plan to expire cause i will never use sprint again i am a customer spervice specialist and i can say that this whole experience is the worst i have had with any with any company ... i just hope you are not their next victim

[k7t266a]

Sprint like Nextel are thieves! I wanted to cancel on the 5th and of course they dont pro rate so Im stuck with another month of there BS service. I got stuck with that contract to! They offer no roll over minutes, are these ppl plain stupid? Geez what is I didnt use my phone at all for a month, it still cost me 80.00, thx nextel for taking care of us YOUR customers. NEVER AGAIN.....