The Losses Continue

Sprint. AOL. Qwest. A BIG OUCH!

As Phone+ writes, "Those Sprint Nextel (S) wireless subscribers are dropping like proverbial flies.The Kansas City-based provider shooed away another 901,000 customers during the second quarter of 2008. Losses totaled $344 million." OUCH! I guess all the advertising isn't working. I would suggest a customer lovefest. Dan call me and I'll explain. Because it looks like more bad news is coming next quarter:

In fact Sprint said in a statement that it “currently expects to report higher post-paid subscriber losses in the third quarter due to a seasonal uptick in churn when compared with second quarter 2008 results.” Translation: Sprint is losing more customers in the next three months. [seekingalpha]

In other news, Qwest reported a 24% drop in net income in 2Q08, while its brethren all tallied big numbers due to cellular adds and triple-play adds, which Qwest lacks. "Revenue was down about 2 percent overall to $3.38 billion" writes Fierce. And the FCC only gave them forbearance on DSL, Fiber and Packet-switched Broadband.

Then there is AOL. "The provider lost 604,000 subscribers in the second quarter alone and is down 2.8 million from the previous year, leaving it at 8.1 million subscribers. That's a $200 million loss (29 percent drop) for the company, which had raised fees on the dial-up service in late June. ... Operating income at AOL dropped 36 percent, to $230 million." [Y!] I was asked by a reporter this morning about this. TimeWarner has too many silos under attack: magazines are losing subs and ad revenue; so is TV (it's moving online). Movies and music are being pirated -- but still making money. TW is in the Cable biz too.

Time Warner Cable (TWC) added 251,000 residential VoIP phone customers in the quarter. Voice revenues climbed 39 percent--$112 million for the quarter--for a total of nearly $400 million. TWC now has a total of 3.4 million digital phone subscribers and a growth rate likely to continue to give incumbent telcos heartburn. [fierce]

While AOL is now 2 separate companies - ads and ISP - most CEO's can barely keep a single silo afloat (see HomeDepot and others). So the sale of AOL ISP to EarthLink should be soon. The ad part will probably go to MSN.

Meanwhile, InterNAP had a bad day too.

UPDATE: Well, it looks like TW may have an AOL exit strategy because Liberty Media's Malone says that "We'd swap our Time Warner stake for AOL Dialup cash cow."

For a detailed look at AOL and its recent activities, see SNL Interactive.