Just a hunch: This isn’t the last time we’ll see this headline. It’s not that I don’t have faith in Sprint’s new CEO, Dan Hesse. It’s that Sprint has to make leaps and bounds to become more relevant in today’s wireless world. And that might take further cuts to accomplish. But in any case, the company has officially announced those rumored layoffs, eliminating 4,000 jobs. They’ve also decided to close eight percent of their corporate retail stores. But the biggest news of them all: The loss of 683,000 postpaid customers. This is far more than the 300,000 to 400,000 that most analysts were predicting at the end of December.
The crew at MarketWatch know more about the financial aspects of the industry than I do, so what do they say about the reasons behind this?
The company has been hurt by a reliance on credit-risky subscribers, mediocre customer service and a less attractive roster of handsets compared to competitors such as AT&T Inc., the exclusive provider of the iPhone.
Yep, pretty straightforward, though “mediocre” can be generous when talking about Sprint customer service.
Two other factors play into this loss. First is the 2.3 percent churn rate, which is considerably higher than Sprint’s chief competitors, AT&T and Verizon. The higher your churn, the more customers you have bolting for your rivals. Sprint has a lot to do in order to get that number back into the 1.5 to 1.8 percent range.
Second, according to MarketWatch, is a reliance on credit-risky subscribers. While AT&T and Verizon filter out many of these customers with a stringent credit check, Sprint is a bit more lenient. So the credit industry’s current tizzy is having its toll on the nation’s No. 3 wireless provider.
Overall, Sprint has lost a million postpaid subscribers in the past year. They’ve made some overall gains — from 53.1 million at the end of 2006 to 53.8 million now — but they’re on the prepaid end.
I expect Sprint to make plenty of news in the coming months. They have plenty of work yet to do.
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honest SPRINT SUX, they need 2 file BANKRUPTCY! c.s. sucks, tech support sux, honest their pre paid service SUX! we need a better company, and leave sprint 2 loose business!