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Sprint doubles profits in Q2

Churn down, ARPUs healthy

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Sprint more than doubled its profits in the three month period ending in June 30, posting net income of $600m on revenues of $7.1bn. That's up from $236m in net income and $6.87bn respectively in the corresponding quarter last year.

The telco's wireless division more than compensated for losses in Sprint's local and long distance wireline divisions. Wireless brought home a $625m operating income on revenues of $4.04bn.

In third place in the domestic cellular market, and preparing to swallow rival Nextel, Sprint has 26.6m subscribers,using its network, up 20 per cent from a year ago. 4.4m of these subscribe to Sprint's MVNOs (Mobile Virtual Network Operators) and 3.3m to affiliates. Sprint added 588,000 net cellular subscribers in the period, rather less than Cingular or Verizon, for which it blamed the higher deposit requirements it had introduced. 187,000 of these punters came from MVNOs, of which Disney is the most high profile recent addition.

Sprint's churn is higher than the two leading contenders at 2.2pc, but it's trending in the right direction: downwards. However, Sprint earns more per subscriber: with a monthly ARPU (average revenue per user) of $62, compared to Verizon's $49.42 and Cingular's $50.75.

Sprint says 7m PCS customers subscribe to a data service, adding $6.50 to the monthly ARPU.

Long distance voice and data, and local voice all saw year-on-year revenue declines, although local data (ie, DSL and special access) grew by 17pc to $240m. Sprint has already earmarked the local division for a spin-off after the proposed Nextel merger is consumated.

Sprint followed the trend of cutting its pensions oblgations to trim expenses. ®

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