Sprinting further down the road to nowhere

The report on Sprint's Q3 makes dismal reading. The seemingly endless attrition continued as the company lost a further 1.3 million subscribers (both pre-pay and the more lucrative monthly accounts) whilst rivals AT&T Wireless and Verizon Wireless reported Q3 subscriber gains of 2 million and 1.5 million respectively - many of whom were former Sprint customers who had voted with their feet and wallets. Sprint now has 50.1 million subscribers - and falling.

Sprint's customer numbers have declined by a further 6.3 per cent over the course of the past 12 months whilst, taken as a whole, US mobile subscriber numbers have increased by seven per cent over the same period.

The fact is that Sprint's market share continues to fall and no-one within the company seems to be able to do anything about reversing the long decline. Indeed, the carrier's current CEO, Dan Hesse, parachuted into the company a year ago with the brief to rescue it from the ghastly results of the disastrous merger (engineered by one of his predecessor's) between Sprint and its erstwhile rival Nextel, seems to be helpless.

Looking like a rabbit caught in the headlights of an approaching forty-ton Mac Truck, Mr. Hesse was unable to offer shareholders, analysts, bankers or staff any succour. He admitted that "pressure" on the company would continue unabated in Q4 and that subscriber losses would remain high.

"We have yet to turn the corner" was all he could say - and this before the harsh reality of incipient recession fully impacts the discretionary and disposable income of the mass of the American public.

US consumers are just beginning to delay the purchase of new handsets and increasingly are holding on to old models whilst also cutting-down on the number of mobile applications and services they are using. As the trend becomes a groundswell and then a tsunami things will get much worse, very quickly.

And let us remember that only a month ago, Mr. Hesse, speaking at a conference convened by the US National Press Club, was telling all and sundry that US consumers now regard their wireless phones as an extension to their bodies and personalities and "will not end their contracts".

Warming to his theme he added, "For the majority [of subscribers] the luxury today is wireline. Wireline carriers will be impacted more than wireless,” whilst opining that the mobile industry will sail through the global credit crunch with minimal worries. Hmm.

Well, here's the reality.