US telecoms giant Sprint Corp has posted flat profits for 2003 after its wireless unit widened its year-end loss.
For the fourth quarter, the group made a consolidated net profit of $38m, down slightly from $39m in the year-ago quarter. Revenues rose 2.1% to $6.68bn from $6.54bn. For the year ended December 31, it posted net income of $1.21bn, up from $630m in 2002. Revenues remained flat at $26.19bn, from $26.67bn in 2002.
Sprint said it reduced net debt for the full year by $4.2bn. Debt now stands at $16.7bn. The company had $2.4bn cash on hand at the end of the year.
Sprint is divided into two divisions, each with its own stock. The FON Group is the company’s core landline phone business, and the PCS Group is its wireless division.
For the year, Sprint’s FON long-distance unit posted an encouraging 55.3% rise in net income to $1.87bn, from $1.2bn in 2002. Sales however declined 6.8% to $14.18bn from $15.22bn in 2002, which Sprint blamed on the competitive market and lackluster customer demand.
The operator’s wireless operation, the PCS Group, posted a larger net loss of $322m compared to a net loss of $255m in 2002. Sales did rise 8.4% however to $3.30bn from $3.05bn in 2002.
The PCS wireless unit added over one million net customers in the fourth quarter, and at the end of 2003, it served a total of 20.4 million customers, an increase of more than 2.6 million, or 15%, from a year ago.
Average monthly service revenue per user (ARPU) in the fourth quarter was $62, the same as a year ago. Churn, or the rate at which customers leave a service, was 2.7% for the quarter – an improvement from the year-earlier quarter, when Sprint had a churn rate of 3.5%.
Sprint had been concerned it may have been hit when the new number-portability rules took effect in November 2003. However, it took steps before portability began and cut prices on some of its most popular calling plans.
In a conference call, Sprint executives confirmed that the new regulations (which allow consumers to keep their wireless numbers when they switch carriers) didn’t affect Sprint’s net customer gain during the fourth quarter.
The Overland Park, Kansas-based company is the fourth largest long-distance operator in the US.
Last November, it announced that it was axing around 2,000 employees as a result of its restructuring and cost-cutting measures, that were designed to reduce operating expenses by 5% to 7% over the next three years to combat ongoing pressure on margins.
As part of this plan, an additional 5,000 to 6,000 jobs at Sprint will be outsourced to IBM Global Services.
This article is based on material originally published by ComputerWire