Sprint Continues to Lose Customers as It Waits for T-Mobile Verdict

Date : 01/27/2020 @ 4:14PM
Source : Dow Jones News
Stock : T Mobile US Inc (TMUS)
Quote : 90.16  -1.08 (-1.18%) @ 1:00AM
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Sprint Continues to Lose Customers as It Waits for T-Mobile Verdict

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2 Months : From Dec 2019 to Feb 2020

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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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