Feeds

Price war torpedoes Sprint forecasts

Roll on 3G

  • alert
  • submit to reddit

Intelligent flash storage arrays

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
TEEN RAMPAGE: Kids in iPhone 6 'Will it bend' YouTube 'prank'
iPhones bent in Norwich? As if the place wasn't weird enough
Consumers agree to give up first-born child for free Wi-Fi – survey
This Herod network's ace – but crap reception in bullrushes
Crouching tiger, FAST ASLEEP dragon: Smugglers can't shift iPhone 6s
China's grey market reports 'sluggish' sales of Apple mobe
Sea-Me-We 5 construction starts
New sub cable to go live 2016
New EU digi-commish struggles with concepts of net neutrality
Oettinger all about the infrastructure – but not big on substance
EE coughs to BROKEN data usage metrics BLUNDER that short-changes customers
Carrier apologises for 'inflated' measurements cockup
Comcast: Help, help, FCC. Netflix and pals are EXTORTIONISTS
The others guys are being mean so therefore ... monopoly all good, yeah?
Surprise: if you work from home you need the Internet
Buffer-rage sends Aussies out to experience road rage
prev story

Whitepapers

A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
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.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.