The effects of the credit crunch…
Well it appears that the effects of our credit crunch are starting to show up in non-essential services.
Sprint is losing subscribers. Big time. Sprint lost 337,000 post-paid subscribers, or customers who sign annual contracts and pay monthly bills. Total subscribership fell 60,000 from the second quarter to 54 million. The competition, however is doing better. AT&T and Verizon Wireless added two million and 1.6 million net subscribers, respectively. Furthermore, Sprint expects subscriber losses to continue into the fourth quarter.
It seems that Sprint’s troubles stem from its reliance on customers with poor credit, the cellphone industry’s version of the subprime-mortgage market. The same kinds of people who now are having trouble paying their mortgages on time also are having trouble paying cellphone bills.
It’s fun to see the market forces work like they’re supposed to! Unless of course you hold Sprint shares, in which case you’re getting a lesson in market finance and economics.
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I wonder if the reported “contract” data is actually reflective of the amount of customers they’ve lost. I’m a Sprint customer whose fulfilled his contract(s) and continues on a monthly basis.
One good thing about Sprint’s problems is that they are now offering me better deals to sign that two-year contract. I think I’m going to wait a bit and see if EVEN BETTER offers happen.