Sprint Nextel Loses $344M Amid Mass Defections To AT&T And Verizon

August 6, 2008 12:02 p.m. EST

New York, NY (AHN) - Sprint Nextel Corp., posted a second quarter $344 million loss and anticipates more losses as more customers defect and go to AT&T Inc. and Verizon Wireless. The reasons are twofold: not only is the nation's third largest wireless telephone network losing customers to the larger competitors, but it also took on too many customers with poor credit who couldn't pay their bills in a slumping economy. The second quarter loss amounted to 12 cents a share, Sprint confirmed Wednesday. Sprint says it will raise $3 billion through the sale of convertible preferred shares, in hopes of paying down its debt. Sprint lost 901,000 customers and reported a turnover rate of 2 percent or its contract subscribers. The losses are expected to worsen in the third quarter, the company acknowledged without going into details.

Sprint Nextel Chief Executive Officer Dan Hesse has revamped the company's advertising campaigns and cut prices on calling plans in hopes of winning back customers after losing more than a million in the first quarter alone. AT&T, the biggest U.S. wireless service provider based in Dallas, added 894,000 contract subscribers last quarter, while Verizon Wireless, located in Basking Ridge, N.J., added almost 1.5 million.