Sprint posts another quarterly loss as T-Mobile merger remains on hold
Sprint's troubles haven't ended as it awaits closure on its pending merger with T-Mobile.
Sprint's 5G launch has been seemingly put on hold while the company awaits updates on its pending merger with T-Mobile.
Sprint's pending merger with T-Mobile has kept the company in a bit of a limbo state. While the deal has received approval from the Department of Justice and the Federal Communications Commission, litigation from 16 attorneys general over whether the deal would be anti-consumer, along with a pending review from the California Public Utilities Commission, has kept the $26.5 billion deal on pause.
The holding pattern hasn't been kind to Sprint, which has been recording quarters of subscriber losses and has seemingly paused its 5G rollout after launching in nine cities earlier this year as its financial troubles kept piling up.
Sprint's fiscal second-quarter results didn't help much either, with the company on Monday posting a net loss of $274 million for the quarter.
Total revenue for the quarter came in at $7.8 billion, lower than the $8.17 billion analysts polled by Yahoo Finance estimated. The company lost 91,000 postpaid phone subscribers in the quarter.
Postpaid subscribers pay their phone bills at the end of each month and are valued more highly by financial analysts.
Overall, Sprint's total subscriber count continued to fall with a total loss of 396,000. The decline dropped the company's overall count from roughly 54.31 million wireless users last quarter to approximately 53.92 million today.
"I am proud of the resiliency of the Sprint team as they work to deliver results in a challenging environment," said Sprint CEO Michel Combes in a statement accompanying the results. "However, I remain convinced that merging with T-Mobile and building one of the world's most advanced 5G networks is the best outcome for all consumers, employees, and shareholders."
In a "message from management," Combes also said that Sprint, which was recently accused of defrauding the FCC about its Lifeline program, is "committed to reimbursing federal and state governments for any subsidy payments that were collected incorrectly."
In September, the FCC accused Sprint of claiming subsidies for 885,000 Lifeline subscribers who were not using the program, which is subsidized to provide phone service to low-income individuals and families. "While not material to overall results, net operating revenue, wireless service revenue, adjusted EBITDA, operating income, and net loss in the quarter were all negatively impacted by this issue," Combes said.
In a call with investors and analysts following T-Mobile's earnings last week, T-Mobile CEO John Legere said that he now expects the deal to close in "early 2020," a timeline echoed by Combes. T-Mobile is working to reach a settlement with the attorneys general, and if none is reached, the suit is expected to head to trial on Dec. 9.
