Sprint Wireless shows negative net growth in subscribers in 3rd Quarter
Continuing problems for the telecom industry are highlighted in this Wall Street Journal story (subscription required) on the Sprint's wireless division's negative net customers in this past quarter, "a virtually unheard-of development for a major cellular carrier."
"The wireless industry is heading toward an end game scenario that looks like the airline industry," said Roger Entner, a wireless analyst for the Yankee Group, a technology-consulting group in Boston. "The airlines are very affordable but nobody likes the service, [they're] not profitable and everybody bounces in and out of bankruptcy. This is right where these guys are headed."
The problems at Sprint PCS could also provide another cautionary tale for the entire wireless industry, where slowing subscriber growth rates means some carriers are planning on targeting potential customers with riskier credit profiles. Sprint attributed the latest bit of bad news to continuing problems with nonpaying customers in its "Clear Pay" program, which allows subscribers with poor credit to sign on for service with a spending cap of $125.
...The program has contributed mightily to the growth of the carrier's total customer base. As of the second quarter, half of the carrier's new customers were signed up through the program, and Clear Pay customers now make up roughly one-third of its total subscriber base of 14.6 million people.