[ft] Sprint Nextel’s net loss widened by 12 per cent year over year to $384m in the second quarter, as the wireless carriers increase in prepaid revenues failed to offset the decline in its contract wireless service.
Sprint lost 4 cents a share, excluding special items, missing analysts’ average expectations of a loss of 1 cent a share. Operating revenue fell 10 per cent to $8.1bn.
The wireless company has moved to expand its pre-paid business as it struggles to stem customer attrition in its post-paid business following its disastrous $36bn merger with Nextel in 2005.
The number of Sprint’s contract subscribers fell by 991,000 to 34.4m in the second quarter, a steeper loss than the 776,000 subscribers it lost in the same period last year, but narrower than the 1.25m it lost during the first quarter.
But the company’s pre-paid Boost mobile business grew by about 777,000 subscribers to 5m over the quarter, compared with a loss of 138,000 over the same time last year.
Sprint moved on Tuesday to expand its pre-paid business, announcing a $420m deal on Tuesday to acquire Virgin Mobile USA, the wireless phone company in which Sir Richard Branson’s Virgin Group is the largest shareholder.
The Virgin Mobile USA transaction should enable Sprint to more than double its customers on pre-paid packages. Virgin Mobile USA had 5.3m pre-paid customers at the end of March.
Shares of Sprint fell by 4.58 per cent to $4.38 in pre-market trading on Wednesday.
Sprint loss widens as customers defect