Sprint on Tuesday unveiled second quarter earnings that showed record revenues of $8.8 billion, but the company couldn't stop the bleeding that has resulted from the shuttering of its Nextel iDEN network.
While Sprint said it has managed to migrate 4 million iDEN subscribers over to the Sprint platform, the June 30th closing of the push-to-talk network contributed heavily to a $1.6 billion loss. According to a press release, total operating losses of $874 million included accelerated depreciation of approximately $430 million and non-cash charges of $623 million related to the Nextel shutdown.
Postpaid subscriber losses topped 1 million, which puts Sprint's total subscriber base at 53.6 million, down annually from 55.2 million.
In an update on the company's Network Vision initiative, Steven Elfman, the company's head of network operations, said that Sprint is moving quickly to launch its LTE network. In an earnings call, he said that over 600 cities are now under construction. With 41 new LTE markets announced today, Sprint is now offering the service in 151 cities total.
Sprint CEO Dan Hesse said that Sprint will look to put Clearwire's 2.5 GHz spectrum to use as soon as possible, as the airwaves would bring the carrier "close to competitive parity" with AT&T and Verizon.
"That will give us some extraordinary capacity," Hesse said, adding that Sprint will start focusing more on its network in its messaging as the carrier continues to build density.
Fully 86 percent of quarterly Sprint platform postpaid handset sales were smartphones, including approximately 1.4 million iPhones.
Elfman said the company will have a few tri-band handsets in the fourth quarter that will support the company's spectrum holdings in the 2.5 GHz, 1.9 GHz and 800 MHz bands. Beginning in 2014, all of the devices Sprint sells will support the 2.5 GHz band. But Elfman said that comment should be taken with regard to all devices except for the iPhone, which he declined to comment on.
When asked about the company's move to guaranteed unlimited plans, Hesse said the plans help reduce churn.
"What drove an awful lot of churn were overages," Hesse said, which in turn led to more calls to customer service. "When we do the math, that's why believe unlimited works for us in the long-term."
On a stand alone basis, Sprint said it would expect its 2013 Adjusted OIBDA forecast to between $5.5 billion and $5.7 billion. The company’s previous forecast was for Adjusted OIBDA to be at the high end of between $5.2 billion and $5.5 billion and did not include the dilutive effects of the SoftBank and Clearwire transactions, which are estimated to be approximately $400 million, subject to finalization of fair values. Including the impacts of these transactions, the company now expects 2013 Adjusted OIBDA to be between $5.1 billion and $5.3 billion. The company expects 2013 capital expenditures of approximately $8 billion.
Shares of Sprint were up 4 percent in early trading to $5.97.