With competitors AT&T (NYSE:T) and Verizon (NYSE:VZ) adding 1.6 and 2 million subscribers each the last quarter, Sprint (NYSE:S) needs to do something big, and fast. Sprint released results Thursday and true to the pre-announcement and consistent with results the last two years, they lost more subscribers in the last quarter, seeing 337,000 of them flee. These defections caused earnings to fall 77% from last year.
Paul Saleh, the company's current CFO and acting CEO said he expected the company would still "struggle with subscriber additions" (translation: more losses) during the fourth quarter but the company was increasing its customer service operations, marketing and internal incentives to keep more customers from dropping their service.
Back in September I said:
They (Sprint) have yet to stop the exodus of customers to other providers. It is not the network issue(s) making them do it, it is the treatment they get when they call Sprint that is making them flee. Sprint's firing of customers was a PR fiasco and likely gave more than a few potential customers serious pause about joining Sprint. There are plenty of providers out there for people to choose from, having an adversarial relationship with them is not the way to grow.
I concluded dating: Until that issue is fixed, any upside and real improvement for Sprint will be put off indefinitely.
fact that Sprint has finally realized this is a huge deal. But, and the
this is a huge but, the damage they have done the past two years cannot
be fixed in a quarter or two of playing nice. They need something big.
Enter the Gphone. Reports are Sprint is pushing hard to be the first provider of the device. It is really the only thing that can propel shares anywhere in the next 6 months to a year for shareholders. The debut of the phone, most likely available in several models and price ranges, will be an instant hit and turn Sprint's fortunes around. I would be shocked if Google (NASDAQ:GOOG) locked it up with one provider like Apple (NASDAQ:AAPL) did with the iPhone for 5 years, but I would assume a short one. Sprint needs to be #1 in this race.
If they do get it, then shares may be a buy assuming they can fix the customer service issues that are currently crippling the company. Even a great new product that people want will not save you if they can eventually get it somewhere else after you make them hate you. This does bear close watching though...