Sprint Unlimited Plan Emphasizes Data

Sprint Q4 results were “disappointing,” Hesse said. Sprint reported a loss of $29.45 billion after recording a $29.7 billion impairment charge for goodwill (the amount a company paid for acquisitions minus their actual asset value). In Q4 2006, Sprint reported a $261 million profit. Revenue dipped 6 percent year-over-year to $9.85 billion due to reduced ARPU and massive wireless customer loss. Sprint lost 683,000 postpaid subscribers in Q4 and expects to lose 1.2 million more this quarter, Hesse said. Operating Income Before Depreciation and Amortization fell 23 percent year- over-year to $2.45 billion. This quarter, Sprint expects it to decline again to $1.8-$1.9 billion, he said.

Sprint’s “many” issues are “more difficult” than Hesse expected and it will take “many quarters” to reverse the carrier’s downward momentum, he said. “Financial performance will not improve overnight,” but it can over time if Sprint focuses on the customer, he said: “I see one strong brand that lacks relevance and a clear message. This will change.”

Sprint aims to use data to top unlimited voice offers its top three rivals announced last week (CD Feb 20 p17). Sprint’s plan, “Simply Everything,” also costs $99.99 a month, but adds unlimited Web access, push-to-talk, e-mail, SMS, GPS navigation and Sprint TV, Hesse said. It also includes exclusive NFL and NASCAR content. For families, Sprint will discount $5 for each additional line. The plan goes on sale today (Friday).

The plan isn’t a “silver bullet” and “clearly won’t be enough” to deal with Sprint’s problems, Hesse said. But it sets the stage for Sprint to differentiate itself around what Hesse considers the carrier’s strength: data. “We intend to own the data world going forward,” Hesse said. Raymond James analyst Rick Prentice lauded the offer on the Q4 call: “This is the plan we were looking for,” he said. But another analyst said the plan wasn’t as fresh as Sprint said, comparing it to a $55 T-Mobile plan. Sprint Chief Marketing Officer John Garcia disagreed, saying it’s “unfair to compare our speed to T-Mobile’s speed… They're still on a fairly slow network and their data offering is primarily just text and e-mail.”

Improving the customer experience is “job one” for Sprint, Hesse said. Part of the problem is that Sprint has “let our business get too complex,” and Sprint is adjusting wireless plans to make them simpler for customers to understand, he said. Sprint is also standardizing customer service across its call centers, said Bob Johnson, chief service officer.

Sprint aims to improve -- not kill -- its struggling iDEN business, Hesse said. Customer losses on the Nextel network have been “unacceptable,” but “having two platforms is better than having one,” he said. The CDMA and iDEN networks have “unique strengths” and cater to different customers, he said. Sprint plans to better integrate the networks’ rate plans, he said. Sprint is also introducing new Motorola iDEN handsets and plans to release a BlackBerry with iDEN and Wi-Fi later this year, he said. Meanwhile, Sprint is beta testing the CDMA flavor of push-to-talk with employees and select customers, said Kathy Walker, chief network officer. The service will roll out in Q2 and hit 20 markets this year, she said.

Rebanding of 800 MHz spectrum is on track, Walker said. “We have market-by-market playbooks out there, and both our sales teams and the local network teams… All systems are green.”

Sprint is still talking with Clearwire about a WiMAX deal, but no final agreement has been made, Hesse said. Hesse declined to give new information on service expansion from test markets. Sprint is “looking” at “potential investment alternatives,” he said.