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Sprint improves EBITDA growth on switch to handset leasing
2015-08-04 14:18:00| Telecompaper Headlines
(Telecompaper) Sprint reported second-quarter adjusted EBITDA up 14 percent to USD 2.1 billion, while revenues were still down 9 percent to USD 8.0 billion. The improved EBITDA was due in part to the switch to handset leasing, which moved associated costs to depreciation from product costs, as well as lower costs at the wireline operations and for bad debtors. The company also raised its full-year outlook for adjusted EBITDA to USD 7.2-7.6 billion, from an earlier estimate of USD 6.5-6.9 billion, excluding any accounting impacts from the lease financing. The shift to lease plans also contributed to the drop in revenues, as handset revenues are now realised over the course of the contract. Equipment sales fell to USD 990 million from USD 1.1 billion a year ago, and service revenues dropped to USD 7.0 billion from USD 7.6 billion. Sprint succeeded in adding a net 675,000 connections in the three months, as 310,000 new postpaid users and 731,000 wholesale lines offset the loss of 366,000 prepaid users. In total the company had 56.812 million connections on the Sprint network, up from 53.331 million a year earlier, as well as 856,000 customers still from Clearwire. While connections grew in Q2, the company still lost a net 12,000 postpaid phones in the period. Sprint said it reversed the loss of phones for the first time in two years though, with net gains in May, June and July. Postpaid churn fell to 1.56 percent from 1.84 in Q1 and 2.05 a year ago, and the operator said it was a net winner in portings. Postpaid ARPU still fell to USD 55.48 from USD 56.94 in Q1 and USD 62.07 in Q2 2014.
Tags: growth
switch
leasing
sprint
Category:Telecommunications
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