US mobile operator Sprint Nextel reported a jump in subscriber growth in the fourth quarter thanks to the launch of iPhone sales, while the costs of introducing the Apple handset and upgrading its network pushed margins lower. The company had its best subscriber additions in six years, adding a net 1.6 million customers for a record of over 55 million at year-end. Net additions included 668,000 retail subscribers, of which 161,000 postpaid, and 954,000 wholesale and affiliate subscribers thanks to prepaid growth at MVNOs. Retail postpaid, which accounted for over 33 million customers, saw ARPU improve to USD 58.59 from USD 57.65 in the previous quarter and USD 55.26 a year earlier, driven by data services.
Helped by the sale of 1.8 million iPhones, Sprint's total revenues rose 5 percent year-on-year to USD 8.72 billion. However, adjusted OIBDA fell 36 percent to USD 842 million. Sprint estimates the iPhone and network costs took 8.8 percent points off the margin, reducing it to 10.8 percent. As a result, the company's net loss widened to USD 1.40 billion from USD 929 million a year earlier. That also includes another USD 135 million impairment charge on its stake in Clearwire. Free cash flow tumbled 72 percent to USD 257 million, as capex rose 48 percent to USD 900 million. Cash flow included USD 135 million from a FCC reimbursement of licence fees.
Sprint forecast a sharp fall in OIBDA in 2012 to USD 3.7-3.9 billion from USD 5.1 billion last year, while service revenues are estimated up 4-6 percent. Capex will jump to USD 6 billion this year from USD 2.9 billion in 2011, as the company expands its network and launches LTE later this year. The company said its Network Vision project is on schedule, with 12,000 sites to be on air by the end of 12,000 and the majority of the investments completed in 2013. Sprint had USD 6.7 billion in cash at the end of the quarter, with its next debt due in May 2013.
