Sprint's Death Spiral
February 29th, 2008 by Jon Taplin
As I suggested a few weeks ago, Sprint is going to have a hard time surviving as a standalone company. They reported a $29.5 Billion loss yesterday.
Sprint has been struggling to keep its 53.8 million customers happy. Mr. Hesse said it expected to lose another 1.2 million subscribers this quarter, about the same amount it lost in all of 2007. He said it could lose even more customers in the second quarter.
Those shareholders who think Sprint will be bought by one of the two big boys, Verizon or AT&T, are probably going to be disappointed. If you can win 1 million sprint customers per quarter by doing nothing, why spend the money on a screwed up company.
You hit the nail exactly on the head. Whay should they try to buy the company out when the majority of Sprint’s market share is going to be coming to them in the next few years anyway.
Great site, great content; a man of like mind.
T & VZ would rather have a struggling but viable competitor in Sprint. Now that they’re in this spiral, once their stock/assets approach fire sale valuation (15-16 Billion) Google or Comcast will purchase, I predict.
Carthur-Comcast had a JV with Sprint that was a total disaster. They have now purchased some spectrum and plan a mobile start up. As for Google, I doubt they want to be in a customer service intensive business.
How long before it’s worth buying sprint just for the spectrum licenses? (Of course, as a sprint customer who’s actually fairly happy with them, I’m not thrilled with hearing about a death spiral. But I can’t say as I’ve been paying a lot of attention to them.)
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Jon, if you aren’t already, you should check out Martin Geddes’ blog, Telepocalypse: he’s had a great time explaining how Sprint might survive, if only they would listen (to him, as an ex-Sprint man himself). Makes for good reading, especially when he rants about bad customer care by telcos…
http://www.telepocalypse.net/archives/001126.html
Zestypete-I just read the post you suggested. That is actually the first reasonable idea I’ve heard to save Sprint.