Sprint was sued by iPCS, an affiliate, over its exclusive arrangement, which means Clearwire cannot use the spectrum. OOPS! [TMCNET]
"Officials at iPCS, Inc., a Schaumburg, Illinois-based company, say the Circuit Court of Cook County denied Sprint’s motion seeking to dismiss complaints that the merger would violate their exclusivity arrangement. iPCS essentially believes that it has the exclusive right to sell Sprint-brand wireless mobility communications network products and services in its 80-odd markets."
You can tell that when a company is having troubles it doesn't need this sort of crap from its affiliates, who made their deal 10 years ago. I wonder how many times Sprint has tried to buy iPCS. "The judge also granted our motion to dismiss several of the claims brought by iPCS, including one for speculative monetary damages, which we view as a positive outcome for Sprint," Sprint's spokesman Sullivan said. It's still an ugly mess for Sprint. To top it off...
Sprint announced its financials for the first quarter of 2009. Sprint posted a first-quarter loss of $594 million on revenue of $8.21 billion, a 12% drop from 1Q08.
It did somehow throw off free cash flow (huh?)
"Sprint during the quarter generated $796 million of free cash flow — enough to pay all of its debt that comes due this year, CEO Dan Hesse said in the release. At the end of the first quarter, Sprint had $4.5 billion of cash and cash equivalents and $1.4 billion of borrowing capacity through its revolving bank credit facility." [BizJournal]
The wireless losses continue as Sprint lost about 182K wireless customers in the first quarter. While Sprint lost about 1.25 million contract customers and 90,000 prepaid customers from its Sprint network, "the company added 394,000 wholesale and affiliate subscribers, and 764,000 prepaid customers on its Nextel network through its $50 unlimited, no-contract Boost plan. Sprint, the nation’s No. 3 wireless carrier, has a total of about 49.1 million wireless subscribers." [BizJournal] Less debt worries this way, but Sprint needs a handset. While rumor is that VZW is negotiating with Apple for an iPhone or new Newton or some similar device, no word at all out of Sprint about an Android or other cool handset. Only bet so far is on the Palm Pre. John Cox at NetworkWorld says that Palm is doomed. Handsets have always driven cellular sales.
Gary Kim points out that Boost is all Nextel and with construction companies closing, the iDEN network has a lot of unused capacity. Also, the $50 pre-paid plan is lower ARPU than the $56 on post-pay -- which is the segment that Sprint has lost millions in.