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Sprint's Third Quarter 2012 Results Show Dedication to Network Vision, Nextel Recapture

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October 25, 2012

Sprint's Third Quarter 2012 Results Show Dedication to Network Vision, Nextel Recapture

By Rich Steeves, TMCnet Managing Editor

While Sprint’s (News - Alert) third quarter 2012 financial results show a diluted loss per share, there are many positive numbers in its report that indicate that the wireless provider is headed in the right direction.

The company posted a diluted loss per share of 26 cents in the third quarter, but some of that had to do with Sprint’s ongoing plan to dismantle the Nextel network. The company attributed a loss of 14 cents per share to the shutdown of the Nextel platform and the dismantling of Nextel sites.

In the conference call to discuss the earnings statement, Dan Hesse (News - Alert), CEO of Sprint, discussed the company’s three major areas of focus: the customer experience, the brand and, most important of all, according to Hesse, cash. He cited some impressive statistics, including an operating income before depreciation and amortization which came in above consensus for the fifth straight quarter and an average revenue per user rate that was up five percent. He also mentioned that the company had experienced its lowest ever rate of customer attrition.

Among the positives in the Sprint report was the number of post-paid Nextel subscribers that transitioned to Sprint. At 59 percent, this number exceeded expectations. Hesse also mentioned that Sprint had 1.5 million iPhone (News - Alert) activations in the quarter, and 40 percent of those were new customers, which represents a new revenue stream for the company.

In addition to accolades for being one of the greenest companies in the country, Sprint also received two awards from JD Power & Associates, including one that commended Sprint on having the highest satisfaction with purchases experience among full service wireless providers.

Overall, the Sprint platform continues to grown in terms of number of users. It boasted 52.9 million users in the quarter, an all-time high and the ninth straight quarter of growth. Sprint executives expect the addition of the iPad Mini and fourth generation iPad to help boost this number even higher.

Steve Elfman, president of network operations and wholesale at Sprint, discussed the company’s network vision, remarking that Sprint had rolled out LTE (News - Alert) in 32 cities and construction is underway in 200 more.

Joe Euteneuer, chief financial officer of the company, focused on the 900,000 customers added to the Sprint platform, the growth of six percent in the prepaid sector, and the growth in the wholesale business. He did point out that Sprint is now entering the “cash burn” phase of its long-term plan, and the company expects its cash flow to be a negative number in the next several quarters.

Edited by Brooke Neuman

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