After a long string of customer losses, Sprint says it expects to post 967,000 new customers in the third fiscal quarter of 2014, including its first gain in postpaid users in several years.
Sprint says it has gained about 967,000 new customers
in the third fiscal quarter of 2014, giving the carrier some very welcome news after several years of sustained customer losses.
The company reported the customer gains in a Jan. 8 announcement that touted its preliminary Q3 customer numbers, which will be finalized when the company reports its quarterly earnings in February.
The estimates show that Sprint gained 967,000 new customers overall, including 30,000 postpaid net additions, customers who have two-year contracts with the carrier; 410,000 prepaid net additions, customers who use prepaid accounts that are paid by the month through Sprint partner brands including Virgin Mobile, Boost Mobile and Sprint Prepaid; and 527,000 new wholesale additions, customers of smaller Mobile Virtual Network carriers who buy services from Sprint and offer them to their own customers.
The best news out of the announcement for Sprint is likely the addition of the 30,000 postpaid customers, the most lucrative users for carriers because they have contracts and commitments and tend to stick around longer.
"The trend of postpaid additions is something that Sprint has been losing over the last couple years," a Sprint spokesman told eWEEK
in a Jan. 9 telephone interview. "So the fact that we are now seeing positive numbers, though they are still not as good as we'd like, it's a trend in a good direction."
In the quarter ended Sept. 30, 2014, Sprint lost 272,000 postpaid customers, while in the quarter ending June 30 some 181,000 customers were shed, according to Sprint's figures. The quarter ending on March 30 finished with a loss of 231,000 customers.
Sprint said in its announcement that the growth in 30,000 postpaid customers is the highest number of postpaid gross additions in three years, and is a 20 percent increase for the quarter year-over-year.
"Sprint's first priority is a return to customer growth and our results during the last quarter show we are on the right track," Marcelo Claure, Sprint's CEO, said in a statement. "While we still have work to do, it is clear that our aggressive actions to provide customers with the best value in wireless are gaining momentum."
Sprint and its three largest U.S. competitors—Verizon Wireless, AT&T Mobility and T-Mobile US—have been continuing to pummel each other over prices, data packages and other features in the war for more customers and revenue since the second half of 2014.
In December 2014, Sprint bumped up its challenge by offering existing Verizon or AT&T customers wireless services at half of their previous rates if they would switch their service to Sprint. The "Cut Your Bill in Half Event" also matches a customer's data plan caps at half of their existing rates for new customers who make the service transfer. The offer, which continues to be available, includes unlimited talk and text to anywhere in the United States while on the Sprint network, regardless of a customer's current plan. Participating customers will have to get new devices through Sprint, but will also get up to $350 in rebates per line to cover early termination fees with their existing carriers.
The half-price offer is not being extended to T-Mobile customers, which is intriguing because Sprint tried and failed to acquire T-Mobile in 2014. In early August 2014, Sprint dropped its plans to buy T-Mobile after the move was opposed by regulators, according to reports at the time. Sprint had been rumored for months to be seeking a merger with T-Mobile so that the two struggling companies could join together and fight harder to compete with mobile powers Verizon Wireless and AT&T. Neither company ever commented publicly on those rumors until Sprint finally said in August that it was giving up its plans.
Following the aborted merger attempt, Sprint then shook up its executive ranks by replacing its former CEO, Dan Hesse, with Claure, the founder and CEO of Brightstar, a subsidiary of Softbank.
In November 2014, Sprint announced disappointing financial results for the second fiscal quarter of 2014, having lost $192 million on consolidated net operating revenue of $8.5 billion, according to an earlier report by eWEEK
. Sprint also announced at the time that 2,000 employees would lose their jobs as the company continued to work to save money and turn its financial performance around.