All Eyes on Sprint PCS
Sprint PCS managed to pull off that feat in third quarter, when it added a record 1.2 million customers and handily beat Wall Street's forecast of about 871,000.Sprint PCS managed to pull off that feat in third quarter, when it added a record 1.2 million customers and handily beat Wall Streets forecast of about 871,000. Many other major carriers missed their targets, although its worth remembering that Q3 historically is a weak sales quarter. The biggest boost usually comes in Q4, when the combination of the holiday shopping season and inclement weather prompt a lot of people to give or get a cell phone. On Dec. 4, Sprint PCS released its 2002 outlook, which calls for a total of at least 3.6 million new subs next year. The company originally said that it would add 3.8 million this year, but on Oct. 17, it revised that forecast upward to about 4.2 million a pleasant surprise, considering that most of the industry had spent the past few months steadily revising down forecasts for handset sales and other key indicators. Its unclear whether the 2002 forecast of 3.6 million includes customers of Virgin Mobile, a virtual operator that will resell Sprint PCS service under its brand. In Europe, many carriers that sell airtime wholesale to virtual ops count the virtual ops customers as their own. That approach pumps up the wholesale carriers subscriber base and stock price.
The dark lining to this silver cloud is that 3.6 million is less than 4.2 million. Sprint PCS apparently thinks that an uncertain economy and a saturating wireless market will conspire to push growth down. Well have to wait to see how many existing customers of Sprint PCS and other carriers sign up for next-generation wireless services, which require new phones to get the full benefit. Upselling to existing customers is one way to offset declines in new subscribers.