Wireless Fuels Sprints Revenue Growth

Long distance revenues fall, but the company's strong wireless business leads to an increase in net revenues for the second quarter.

Giving credit primarily to its wireless business, Sprint Corp. officials this morning reported an increase in net revenues of 6 percent this quarter compared with a year ago.

The growth was "the result of our unique nationwide wireless and wireline assets that offer integrated communication solutions to businesses and consumers, and a customer-driven team that is producing a diversified and growing roster of satisfied users," Gary Forsee, Sprint chairman and CEO, said upon announcing the quarterly earnings.

Wireless revenue rose 17 percent compared with a year ago, but the companys overall growth was offset by falling long-distance revenue, which dropped more sharply than anticipated.

"We unveiled plans to meet customers demands for faster wireless data speeds and expand the possibilities of anywhere, anytime wireless access to information and entertainment with a significant capital commitment to the next generation of CDMA [Code Division Multiple Access] wireless technology," Forsee said.

/zimages/2/28571.gifSprint is spending $1 billion to upgrade its wireless network to support 3G technology. Click here to read the full story.

The long-distance divisions quarterly revenues fell 7 percent, primarily on account of pricing pressures. In the business market, Sprint and other long-distance carriers have lowered prices to retain subscribers in the face of growing long-distance competition from the Regional Bell Operating Companies. Sprint officials said the decline is a lower rate than the long-distance-backbone carriers are expected to report.

Revenue from local services remained steady, and the company credited its deployment of next-generation switches for the divisions continued "solid profit margins." Sprint expanded its digital subscriber line service, which now reaches more than 5 million of its 7.8 million local access lines, according to the company.

Data revenue fell overall, as frame relay and private line service revenues declined in the second quarter. However, ATM (asynchronous transfer mode) and managed network service revenues grew.

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