Sprint reported overall growth in revenues for the second consecutive quarter, but the company announced a write down of its MMDS spectrum and Sprint PCS attracted fewer new customers than market expectations. Net operating revenues were $6.7 billion, compared to $6.8 billion in the same period last year. Net loss for the third quarter was $498 million versus net income of $519 million for the same period last year. Net loss in the third quarter of 2003 includes a net loss from special items of $768 million, while the third quarter of last year includes a net gain from special items of $260 million and net income from a discontinued operation of $42 million. Sprint will take special a pre-tax, non-cash charge of $1.2 billion to write down the value of its MMDS spectrum, reducing the carrying value of the asset to $300 million.
Some highlights for Sprint FON (comprised of the company's global markets division, local division and other wholesale businesses):
- total voice revenues were flat, sequentially. Retail business voice revenues increased 3%. Consumer revenues continued to be impacted by product substitution and aggressive competition, but were stable compared to the previous quarter. Due to the loss of a major customer, wholesale voice revenues were down year over year as expected.
- data revenues were again stable sequentially with mixed product performance. Frame Relay revenues grew at a low double-digit rate compared to last year, while ATM and Private Line declined. IP revenues were again impacted by a price reduction of a large Dial IP contract. Other revenues were impacted by lower equipment sales and the sale of Sprint's consulting business in Q3 2002.
- during the quarter, Sprint's local division successfully converted two additional switch complexes to packet technology and plans to have converted over 150,000 lines by the end of the year.
- 60% of new customers for Sprint's local division in the quarter signed up for a bundled plan.
Some highlights for Sprint PCS:
- net subscriber additions for Q3 include 184,000 post-paid retail, 290,000 from wholesale channels and 22,000 from affiliates. At the end of the period, PCS Group was serving a total of 19.3 million customers.
- mobile ARPU was just under $63 in Q3, down slightly when compared to the year ago period and $1 higher sequentially.
- the company now has 2.7 million PCS Vision customers, up from 2.1 million in the second quarter.
- churn was 2.7% this quarter compared to 2.4% sequentially, but remained much lower than the 3.8% reported a year ago. The company said it is preparing initiatives to improve customer retention ahead of the impending WLNP (wireless local number portability) changes.
