Sprint said revenue in its wireline FON group dipped 3% in 2nd qu...
Sprint said revenue in its wireline FON group dipped 3% in 2nd quarter to $4.31 billion, with net income falling 35% in year to $290 million but meeting lowered company forecasts. It said net income figure excluded costs of…
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failed WorldCom merger and nonrecurring gain on sale of independent directory publishing unit. Despite overall decline, local telecom revenue was up 3% in quarter to $1.55 billion and voice-grade equivalent lines rose 17% in year. In global market segment, revenue dipped 5% as result of sagging long distance voice revenue and reduced sales of network management services and customer-premises equipment. Business voice revenue continued to “be impacted by aggressive market pricing,” Sprint said. However, sales of data services, particularly of asynchronous transfer mode, continued to grow. Data revenue rose 6% in quarter and dedicated IP service revenue 30%. Not surprisingly, Sprint PCS, its wireless tracking stock, showed strong growth, with revenue up 53% in quarter to $2.26 billion. Sprint PCS added more than 1 million customers in quarter, with total customer base, including resale and affiliate customers, reaching 12.8 million, up 60% in year. Sprint PCS said business customer base surged 62%, driven in part by its wireless Internet service for business content and applications. In quarter, carrier made $1.06 billion in capital expenditures. Sprint PCS reiterated that its wireless net customer additions for year could hit 3.8 million. That would create operating profit of $1.7 billion for year, $100 million above forecast. On wireline side, Sprint said it expected FON Group revenue to decline 1-2% in 3rd quarter from year ago. PCS capital spending for year will total $3.4 billion and wireline spending $5.9 billion. Sprint PCS CFO Charles Levine said in conference call that carrier wasn’t affected by recent U.S. Appeals Court, D.C., ruling returning C- block licenses to NextWave. That decision upsets results of C- block auction earlier this year. Levine said: “We only bid on licenses in Tampa, Orlando, Cincinnati, Dayton and Norfolk and we will not be capacity constrained.” He acknowledged ruling “creates a level of uncertainty in the industry” but said ubiquity of Sprint’s wireless network safeguarded company from impact. Sprint Exec. Vp-CFO Arthur Krause said Sprint PCS would invest $700-$800 million to complete nationwide upgrade to CDMA 1xRTT flavor of 3G. That’s expected to be completed by mid-2002, with half of planned spending this year and half next year.