Sprint Continues to Lose Customers as It Waits for T-Mobile Verdict
January 27 2020 - 11:14AM
Dow Jones News
By Sarah Krouse
Sprint Corp. lost 115,000 postpaid phone connections in the
final three months of 2019, as the company pulled back on
promotions and the company's merger with larger rival T-Mobile US
Inc. remained unresolved.
The No. 4 U.S. wireless carrier by subscribers lost 91,000 such
connections the prior quarter and lost 26,000 during the same
period a year earlier. Such customers are considered lucrative
because they typically pay their bills regularly under longer-term
contracts and are less likely to switch carriers.
The company has lost postpaid phone subscribers every quarter
since late 2018 as generous promotions have ended and customers
departed. Its larger rivals, meanwhile, have attracted new
customers.
T-Mobile said earlier this month it added one million postpaid
phone customers during the final three months of 2019. AT&T
Inc. is scheduled to report its performance for the period
Wednesday, while Verizon Communications Inc. is scheduled to report
on Thursday.
Sprint management didn't hold a call to discuss its performance
with analysts.
An antitrust lawsuit challenging Sprint's merger with T-Mobile
that was brought by a coalition of Democratic state attorneys
general concluded earlier this month. A federal judge is expected
to announce whether the parties can merge in the coming weeks. The
companies also face a challenge in California, where the state
public utilities commission has yet to approve the merger.
The companies announced their $26 billion merger nearly two
years ago in April 2018.
Customer defections from Sprint pushed its postpaid phone churn
-- a measure of its ability to keep customers -- up to 2.06% in the
latest quarter, from 1.84% during the same period a year
earlier.
That is the highest level since the company began disclosing the
metric in 2015. T-Mobile, by comparison, reported postpaid phone
churn for its branded customers of 1.01% for the final three months
of 2019.
Sprint is focused on adding more devices per existing account
with gadgets such as smartwatches, management said in an investor
update, as it pulls back on generous promotions that in the past
have led to customer losses when they expire.
The carrier added 609,000 net new data device connections such
as tracking devices and wearables in the final three months of
2019, up from 335,000 such additions during the same period of
2018.
Those devices are often much cheaper than smartphones but
deliver monthly recurring charges, management wrote, which "has the
potential to deliver improved economics to Sprint and ultimately
our shareholders."
The carrier ended 2019 with a total of 33.8 million postpaid and
8.3 million prepaid connections. Sprint reported a quarterly net
loss of $120 million on revenue of $8.1 billion.
Write to Sarah Krouse at sarah.krouse@wsj.com
(END) Dow Jones Newswires
January 27, 2020 10:59 ET (15:59 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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