Nextel gives Sprint profits indigestion

Customer surge

Sprint today blamed the cost of integrating Nextel, the US cellco for missing analyst profit forecasts for Q4. But the US telco hailed a “solid quarter”, in which it gained more than two million net wireless subscribers.

Net income for the three months to December end, 2005 fell 55 per cent to $197m (Q4 FY2004: $437m) on sales advancing 63 per cent to $11.3bn. Wireless revenues were $8.23bn, more than double the same time last year.

ARPU (average revenue per user) for post-paid contract customers who signed directly with Sprint was $63, against last year’s $65. Churn for this customer class was 2.1 per cent, more or less the same as last year’s 2.2 per cent. The company also does substantial business through affiliates and lower-quality pre-paid revenues through its Boost brand.

Sprint bought Nextel last August for $36bn. ®

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