Aryamehr

Thursday Options Recap

AT the end of their Q3 they had $868 million in free cash flow, $200 million was assigned to their pension fund, leaving them with $668 million in Free Cash Flow. They also retired over $600 million in debt that was due in 2010. At the end of the quarter they had $5.9 Billion in cash with a credit facility of of $1.6 Billion, giving them a total liquidity of $7.5 B.

Now lets see what happened to their subscriber base, well their Pre Paid division called Boost Mobile once again had impressive net adds; 666,000. This is very impressive when you compare the sum of their net adds to that of other carriers. The combined Pre Paid net adds of PCS, Leap (aka Cricket) and T-Moble was no more than 245,000. What has been hurting Sprint was their lack of a credible line-up of Smart phones, however that has changed. At the end of Q1 2010 Sprint should have a line up of phones that will emulate that of any other Telco. This is when you should begin to see a positive churn. Why would anyone want to leave Sprint when they have the cheapest plans with the best line up? Remember Sprint has twice the 3G coverage of ATT and 14 times that of T-Mobile, not to mention that they are the only Telco with a substantial 4G platform.

What you need to remember is that Sprint's arsenal of phones just six months ago was unimpressive, however in Q1 2010 that disadvantage will change. Sprint's selection of new phones will begin to stop the bleeding and their 4G compatible phones will give it a critical advantage for coming to market first. What you need to do is be patient and add to your positons.