Sprint Gains 344,000 Net Postpaid Customer Additions For Third Quarter Of 2016

Sprint has filed its preliminary quarterly financials with the Securities and Exchange Commission (SEC) just recently, and the results are mainly positive. The major US wireless carrier reported 344,000 net postpaid customer additions during the third quarter of this year, as well as registering 347,000 net postpaid phone additions, comfortably surpassing the 275,000 mark projected by Wells Fargo Securities. On top of that, Sprint also posted a total net operating revenues of $8.25 billion, which represents a 3 percent year over year improvement, plus wireless net operating revenues of $7.85 billion (up 5 percent year compared to the third quarter of last year). 

As explained by Jennifer Fritzsche of Wells Fargo, the results of Sprint’s latest quarterly reports are significant because the mobile operator only displayed yearly growth in wireless revenue only once in the last couple of years. The company is also gaining some customer growth momentum, managing to better Wells Fargo’s projections by nearly 75,000.

And it is not just Wells Fargo that has taken notice of Sprint’s glowing performance. Various industry watchers have noted how the wireless carrier has managed to address concerns regarding financial liquidity, at least for the short term. Many analysts now have reason to believe that Sprint will be able to meet is debt obligations (which are quite considerable) through 2017. It certainly helps that the mobile operator has shown signs of continuously expanding its customer base of postpaid subscribers in the past few quarters. 

Still, it is worth noting that Sprint also reported a net loss of 427,000 prepaid users during the third quarter of this year. The bad news is that this number is worse than the 250,000 projected by Wells Fargo. Moreover, analysts are still expressing some concerns over the company’s low capital expenditure, which runs contrary to general expectations. Back in May earlier this year, Sprint lowered its capex guidance for the remainder of 2016 to $3 billion, which represents a clear decrease compared to the range of $4.5 billion predicted by industry watchers. Furthermore, Sprint spent $376 million on capex during the second quarter of this year, which marked a slide from the $1.6 billion it spent during the second quarter of last year. During the most recent quarter, Sprint’s network capex was at $470 million, which is way lower than the $763 million projected by New Street. Although the wireless carrier continues to claim that its approach of small cell roll outs has allowed it to improve coverage and network capacity more cost effectively (compared to standard macrocell deployments), analysts are still doubting if this strategy is sustainable in the long run.