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Sprint Calling Card News, Sprint Telecom News
Sprint writes off $29 billion, customer losses continue

Date: 2/28/2008 4:01:03 PM

Sprint Nextel wrote off $29.7 billion in the fourthquarter as the struggling wireless carrier acknowledged how much its business has eroded over the past couple of years.

The Overland Park company on Thursday reported that sales for the fourth quarter were $9.8 billion, down 6 percent from a year ago.

Sales for 2007 totaled $34.7 billion, down 1 percent from 2006.

The company said it is discontinuing declaring a dividend for the foreseeable future.

Earlier this year Sprint warned investors that it was preparing to take a massive accounting charge, saying it would involve a substantial portion and possibly all of the $31 billion in goodwill it carried on its books.

When final calculations were completed, Sprint executives determined that the company needed to take a noncash accounting charge of $29.7 billion to reflect the declining value of its 2005 purchase of Nextel Communications and smaller affiliate wireless companies.

Sprint detailed again how far it slipped behind wireless industry rivals during the final three months of 2007. Sprint lost 683,000 subscribers on monthly calling contracts and another 202,000 prepaid subscribers.

Even after including gains in such categories as wholesale subscribers, Sprint still finished overall with more than 100,000 fewer subscribers than it had when starting the quarter.

In contrast, AT&T added nearly 2.7 million subscribers, Verizon Wireless added 2 million and TMobile USA nearly added 1 million subscribers during the fourth quarter.

Dan Hesse, Sprints new chief executive officer, indicated that 2008 would bring more challenges in signing subscribers, making sales and tallying profits.

He ordered about 4,000 job cuts, the elimination of at least 1,600 contractor positions and the closure of about 125, or 8 percent, of companyowned stores. The moves are expected to bring $700 million to $800 million in annual savings.

Hesse also brought Sprints corporate headquarters back to Overland Park, reversing a decision that had come with Sprints takeover of Nextel.

Consolidating the senior management team in Kansas, while maintaining a presence in the Washington, D.C., area will allow Sprint to save on real estate costs and travel expenses.

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