Sprint bombed just as expected at yesterday’s earnings. A $29.5 Billion dollar bomb. What people probably didn’t expect was the mass exodus of customers from Nextel. Here was the official announcement today at earnings
The writedown put Nextel’s value at 80 percent less than when it was acquired and the loss is the fifth-largest among Standard & Poor’s 500 Index companies since 1990. Sprint expects 1.2 million subscribers to leave this quarter, as many as it lost in all of 2007. Chief Executive Officer Dan Hesse, who took over in December, said business is deteriorating.
Even this may be an understatement. Everyone moved to Nextel for one reason, their walkie talkie function. You didn’t have to use minutes and was essentially free. Now, with minutes becoming a non issue and each day moving us closer to unlimited plans, who cares about walkie talkie. Now I can just call and talk without everyone in the whole room hearing my conversation. Nextel easily has the worst phones in the industry and the highest rate plans. They didn’t have camera phones until 2 years after everyone else and the phones are ridiculously expensive compared to others. When I see a brick for a phone, I can guarantee it’s a concrete salesman with a Nextel from 100 yards away.
Why anyone would stay with that company is besides me. As soon as the law passed allowing people to take their number I knew they were toast. Sprint is in for a world of hurt. The business is competitive enough with a billion dollar monkey on their back.