Customers Hang Up on Sprint

Published January 12, 2007

KANSAS CITY, Mo. -- Technology problems, strong competitors and
cost-conscious customers continue to bedevil Sprint Nextel Corp. as the
company struggles to make good on a merger that looked so appealing
when it was announced three years ago.
The Reston, Va.-based firm announced this week that it was cutting
5,000 jobs, a decision that came as it disclosed another net loss of
Nextel subscribers in the final months of 2006.

While the fourth quarter brought a gain of more than 1 million users of
other cell brands carried by the Sprint and Nextel networks, direct
monthly subscribers fell by 306,000 as service quality problems drove
away more Nextel customers.
Sprint Nextel also said that it expected near-flat operating revenue
and earnings for the coming fiscal year as it continues to lose
customers and increases its spending on marketing and adding capacity
to its cellular network.

Company officials predicted a return to growth in the second quarter,
but investors hammered the company's stock. Shares closed Monday at
$19.64, but finished Thursday at $17.44 on the New York Stock Exchange,
a drop of 11.2 percent.