/// Sprint Wins the Argument, but It’s Still Losing the War

December 20, 2011  |  All Things Digital


Sprint CEO Dan Hesse Shares of Sprint are rallying by about 6 percent in after-hours trading, on word that AT&T has abandoned its $39 billion bid for T-Mobile. That’s really only a jump of 13 cents per share — a figure that says a lot about the pickle in which Sprint remains, despite the fact that its arguments against the AT&T-T-Mobile combination have prevailed. Sprint no longer has to deal with the threat of a merged AT&T-T-Mobile. But it still has to cope with the fact that it is a distant No. 3 to AT&T and Verizon Wireless. And, after betting on a different 4G technology, the company also has to bring up an entirely new network, all while trying to turn off its older Nextel network. Still, there is some cause for celebration, an opportunity that Sprint did not let go to waste. “From the beginning, Sprint has stood with consumers who spoke loudly and clearly that AT&T’s proposed takeover of T-Mobile would create an undeniable duopoly that would have resulted in higher prices, less innovation and fewer choices for the American consumer,” Sprint said today in a statement, in which it also praised federal regulators for their opposition to the deal. Sprint and its CEO, Dan Hesse, had opposed the deal mightily before government regulators and Congress, and in the court of public opinion, investing a lot of political capital in the process. That said, the deal’s failure doesn’t exactly help Sprint out of the messy spot it’s in. For one thing, Sprint is still losing money . In its most recent quarter, it booked a $301 million loss on revenue of $8.3 billion, which was an improvement over the prior year’s period. On the bright side, it added 1.3 million customers — and that was before it had Apple’s iPhone in its stores to help entice new customers. But while having the iPhone is nice, it’s not helping the bottom line. As The Wall Street Journal reported in October , Sprint has committed to buy more than 30 million iPhones, which will cost it as much as $20 billion over time, and on which it expects to lose money through at least 2014

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Sprint Wins the Argument, but It’s Still Losing the War


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