Sprint may be making a comeback

Word has it that Sprint Nextel is turning things around with the new Samsung Instinct smartphone.

Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
Marguerite Reardon
3 min read

Is Sprint Nextel on the comeback trail?

That's the buzz on various Web sites like The Wall Street Journal and TheStreet.com, as rumors fly that Verizon Wireless and AT&T executives say they are seeing fewer numbers ported from the struggling Sprint to their own networks.

The rumors have been bolstered by a research note published last week by a JPMorgan Chase analyst who quoted Denny Strigl, Verizon's COO, as saying that Sprint has been doing better in the past 30 days.

Press contacts for AT&T, Sprint, and Verizon declined to comment on the rumors, according to TheStreet story.

Regardless of what Sprint and others are or not saying publicly, the speculation sent Sprint's beleaguered stock price up 13 percent last week and up another 5.84 percent on Monday. This boost in share price occurred despite a heavy sell-off in the overall market.

So what's happening at Sprint? Could the company really be making a comeback so soon? One thing is for sure: Sprint is spending a great deal of money and effort trying to at least give the perception that things are changing at the company. In the last few months, it has announced an aggressive marketing campaign starring its CEO Dan Hesse.

Sprint Nextel

Sprint also said last week that its new Samsung Instinct smartphone is selling like hotcakes, which could be a positive trend for a company that has been desperately trying to retain old customers and attract new ones. The company said last week that it had record-breaking sales in the first week the device was on the market. And it's even sold out of the device at some store locations.

These sales are despite the fact that the Instinct, a touch-screen device that looks a lot like Apple's iPhone, hasn't gotten smashing reviews. Several reviewers, including CNET's own Kent German, have noted major weaknesses, notably its lack of Wi-Fi and instant messaging. The call and video quality are also somewhat "erratic," German said in his review. And the Internet browser isn't all that impressive. Not to mention the fact that the phone has a small amount of memory and no editing features for its camera.

In other words, it's no iPhone. But at $129, it's a passable substitute for some people looking for a smart phone that has some iPhone-like features and functionality.

But the Journal article cautions investors not to expect a quick turnaround from the company. Verizon Wireless and AT&T are still tough competitors. And even though it's more expensive than the Instinct, the iPhone 3G lands on store shelves at the end of next week. And at $199 a pop, many analysts expect it to be a hit. Verizon is also set to introduce a new touch-screen smartphone, the BlackBerry Thunder, which could drive subscriptions and help retain customers tempted by the new iPhone.

Sprint has a long road ahead of it in terms of figuring out what to do with some of its assets. The company has already said it will spin out its WiMax assets to create the new Clearwire venture. But there has also been speculation that Deutsche Telekom is interested in buying the company. And there are rumors that Hesse's team is looking to dump the Nextel business, which has been the source of much of the customer defections. Sprint has been pushing its former Nextel customers toward phones with a walkie-talkie feature that uses Sprint's PCS network instead of the Nextel network.

Sprint will report third-quarter earnings sometime in August. Until then, the market will just have to wait and see if Sprint is still bleeding customers or if it's bottomed-out and ready for a comeback.