Sprint announced the results of its fiscal 2013 fourth quarter Feb. 11, making clear that while its Network Vision build-out still has a ways to go, some of the changes it’s making are working.
Sprint finished 2013 with its highest number of platform subscribers ever, 53.9 million, after adding 58,000 postpaid (contract), 322,000 prepaid, and 302,000 wholesale and affiliate subscribers.
But it posted an operating loss of $576 million for the quarter—a 22 percent improvement over the same quarter a year ago—and an annual operating loss of $1.9 billion, up from last year’s $1.8 billion loss.
Sprint also posted its highest-ever annual wireless service revenue, of $7.2 billion, and its best-ever annual revenue per postpaid customer, of $64.07. (By contrast, Verizon Wireless posted fourth-quarter 2013 service revenue of $17.7 billion and—because it now measures average revenue per shared account [ARPA] instead of by user—a retail postpaid ARPA of $157.21 per month.)
Sprint closed its Nextel network June 30 and is feeling the loss of a good chunk of those subscribers. Other subscribers, having had enough of the construction dust, also left. But in areas where Sprint’s “modernization” plan is 70 percent complete, said CEO Dan Hesse, there’s a consistent patter of churn falling and the postpaid base growing.
“The primary driver is the network,” said Hesse. “The network, from a net-add perspective, has not only been having an effect on churn but on gross adds. … You see the churn change right away, and then the gross-adds response [follows] later.”
Sprint’s LTE network now covers 200 million people, and it has begun rolling out Sprint Spark, a technology capable of delivering 50M- to 60M-bps peak speeds today and potentially speeds three times as fast by late 2015, according to Sprint. It’s also rolling out HD Voice across the nation, and expects to complete that effort by year’s end.
Additionally, Sprint introduced Framily Plans (group plans for family and friends) toward the end of the fourth quarter.
“The early indications are strong,” said Hesse, adding that the plans encourage subscribers to recruit their friends to the network, and a majority of people are buying the priciest options.
Still, there’s a “port-in credit offer that’s very rich, and it is having some impact,” Hesse conceded, referring to a recent T-Mobile offer of up to $650 per line to switch, while not naming the carrier directly. “But as we’ve seen historically, the impact is usually large early and then begins to decline.”
(T-Mobile executives mocked Sprint and its Framily Plan during a Jan. 8 press conference. “Pardon our dust?” laughed T-Mobile CTO Neville Ray. “That’s not dust it’s a [bleep] storm!”)
Regarding speculation that Sprint and parent company Softbank are considering a bid to merge with T-Mobile, Hesse joked that he’d read in the paper that morning that he has a big announcement planned (he doesn’t).
While insisting that he doesn’t comment on rumors, Hesse didn’t back away from the idea.
“I’ve said consistently that further consolidation outside of Verizon and AT&T would be healthy for the competitive dynamic of the country,” said Hesse, “… and I still believe that’s very much the case.”