Feeds

Price war torpedoes Sprint forecasts

Roll on 3G

  • alert
  • submit to reddit

Top 5 reasons to deploy VMware with Tegile

ComputerWire: IT Industry Intelligence

On the eve of its launch of 3G services in the US, Sprint Corp has warned that its full-year customer growth figures in its mobile phone business could be 10% to 15% lower than its original estimate of 3 million.

The news, given in a financial update, led to its shares diving 29.5% to $10.58 last Friday, and puts the company in a weak position in the expected consolidation of cellular phone operators in the US.

Sprint's pessimism on subscriber additions comes despite the fact that its plans to launch its nationwide 3G network with "aggressive marketing campaigns" and it expects this will weight customer additions to the second half of the year.

Price-cuts by competitors have created an environment where Sprint said it is "challenging to provide long-term subscriber growth estimates with a high degree of confidence."

Not all mobile operators have such a bleak outlook, and earlier this month Nextel Communications Inc said it was on track to exceed expectations for the current financial year. It said recent strength in monthly revenue, coupled with solid subscriber additions, is driving excellent top-line growth.

Sprint has also lost subscribers after tightening up credit policies, and with competitors launching what it describes as short-term pricing promotions and business customers holding off purchases in anticipation of the arrival of 3G, it said it only expects to get 300,000 new customers in the second quarter.

With lower growth ahead, Sprint has cut capital expenditure of its PCS group by $100m to $3.3bn. Its landline business also has problems. Instead of the low-single-digit decline in revenue it originally expected, it now expects a downturn in the mid-single digits. It is still confident that its FON group will report earnings in line with expectations of $0.33 a share, but this has been made easier by trimming capital expenditure plans by $100m to $2.6bn.

© ComputerWire.

Security for virtualized datacentres

More from The Register

next story
Brit telcos warn Scots that voting Yes could lead to HEFTY bills
BT and Co: Independence vote likely to mean 'increased costs'
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
New 'Cosmos' browser surfs the net by TXT alone
No data plan? No WiFi? No worries ... except sluggish download speed
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Google+ GOING, GOING ... ? Newbie Gmailers no longer forced into mandatory ID slurp
Mountain View distances itself from lame 'network thingy'
Vodafone to buy 140 Phones 4u stores from stricken retailer
887 jobs 'preserved' in the process, says administrator PwC
Bonking with Apple has POUNDED mobe operators' wallets
... into submission. Weve squeals, ditches payment plans
EE buys 58 Phones 4u stores for £2.5m after picking over carcass
Operator says it will safeguard 359 jobs, plans lick of paint
Drag queens: Oh, don't be so bitchy, Facebook! Let us use our stage names
Handbags at dawn over free content ad network's ID policy
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.