CEO Says Sprint Expects to Sit Out 700 MHz Auction
Sprint Nextel doesn’t plan to bid on spectrum in the 700 MHz auction later this year or early 2008, top executives said Wed. in a call on Q4 and year-end financial results. At year-end Sprint had $2 billion cash that it will use to buy back stock and for other purposes, not as spectrum bait. “At this time we have no interest in participation in that,” CEO Gary Forsee said: “We've got the best spectrum position of any of the carrier competitors.”
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Cablevision CEO James Dolan spoke in like manner Tues., with potential players angling for auction positions (CD Feb 28 p9). Thanks to the spectrum’s quality, attorney Rudy Baca doubts any major players will skip the auction if they can get spectrum cheaply enough. “It’s probably game playing,” Baca said: “The deployment costs are so much lower at 700 MHz because of the propagation characteristics that you just do not get spectrum this good coming on the market… The street loves this spectrum. Anyone who wants to buy this spectrum is not having trouble finding backing.”
Sprint isn’t considering a spinoff of its long distance business, Forsee said in response to an analyst question. Last year Sprint spun off its local wireline business, which became Embarq. Sprint’s long distance business accounted for $1.6 billion of its quarterly revenue, compared to $9 billion for wireless. “It is so fundamental to our mobility strategy, its underpinning of our wireless networks… our ability to be a single source as business customers and enterprise customers think about evolving their networks,” Foresee said: “We are not a typical long distance company anymore. We have continued to fine tune that portfolio and focus on things that we think can create great value.”
Sprint Nextel results were mixed. Overall, postpaid subscribers declined 306,000 in the quarter, reflecting a gain in CDMA subscribers offset by a loss of iDEN subscribers. iDEN is a network Nextel brought with it as part of the companies’ merger.
Loss of iDEN subscribers deepened churn. Post-paid churn in Q4 was 2.3%, compared to 2.4% in Q3, but up from 2.1% for the year-earlier quarter. “The increase from the year-ago period is due to higher churn among iDEN subscribers,” Sprint said.
Revenue was up -- $10.4 billion Q4, up 7% from the same quarter in 2005. But earnings fell. UBS saw earnings as “weak” at $0.29 per share compared with estimates of $0.33. Postpaid ARPU came in at $60, a 5% annual decline. Prepaid ARPU came in at less than $32.