Sprint to the finish, or slow walk nowhere.
Sprint Nextel announced a $9-billion network contract with billionaire Philip Falcone’s LightSquared as the mobile service provider attempts to build an alternative high-speed wireless network. But shares fell as investors were skeptical that LightSquared will be able to solve interference problems and raise enough money to pay Sprint.
The company’s turnaround attempt comes as it battles new entrants in the speedier 4G arena. Once the sole carrier with a next-generation wireless service, along with partner Clearwire (CLWR), Sprint now faces stiff competition from Verizon (VZ), which recently launched its own super-fast network, as well as AT&T (T) and T-Mobile, which have both embraced a 4G marketing message.
Shareholders were disappointed that the No. 3 U.S. mobile provider failed to announce a strategy for developing its own 4G high-speed wireless services, as it had previously said it would for mid-year. Sprint reported a wider loss in the second quarter to $847 million, or $0.28 per share, from $760 million, or $0.25 a share, a year earlier. Net operating revenue rose to $8.31 billion from $8.03 billion. Before items such as investment losses, Sprint's quarterly loss per share was $0.06, better than analyst expectations for $0.12 a share.
The mobile service provider lost about 101,000 subscribers in the quarter, compared with the average expectation for 15,000 contract customer losses. In comparison, Sprint's biggest rival Verizon Wireless added 1.3 million subscribers in the quarter while the No 2 U.S. mobile service added 331,000 subscribers. Both of Sprint's bigger rivals have been boosted by sales of the Apple (AAPL) iPhone, which Sprint does not offer. Despite the subscriber losses in the latest quarter, Sprint still expects to report subscriber additions for the full year 2011.
Sprint Nextel (S: NYSE : US$4.34), Net Change: -0.82, % Change: -15.89%, Volume: 206,721,209
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