Sprint - Nextel 2008 Annual Report Download - page 37

The table below summarizes average number of retail subscribers and average revenue per subscriber
for the years ended December 31, 2009, 2008 and 2007. Retail comprises those subscribers to whom Sprint
directly provides wireless services on our networks, whether those services are provided on a prepaid or a post-
paid basis. Wholesale and affiliates are those subscribers who are served through MVNO and affiliate
relationships, and other arrangements through which wireless services are sold by Sprint to other companies that
resell those services to their subscribers. More information about the number of subscribers, net additions to
subscribers, and average rates of monthly post-paid and prepaid customer churn for each quarter since the first
quarter 2007 may be found in the table on page 37.
Year Ended December 31,
2009 2008 2007
(subscribers in thousands)
Average post-paid subscribers(1) ....................... 34,640 38,752 41,454
Average prepaid subscribers(1) ......................... 5,313 4,135 4,391
Average monthly service revenue per subscriber:
Post-paid ...................................... $ 56 $ 56 $ 59
Prepaid ....................................... 33 30 30
Average retail .................................. 53 53 56
(1) Average subscribers include subscribers acquired through business combinations prospectively from the
date of acquisition. Average subscribers for the year ended December 31, 2009 are inclusive of 4,539,000
prepaid subscribers and 835,000 post-paid subscribers acquired through our 2009 business combinations
which were previously included with wholesale and affiliate subscribers. Average subscribers for the year
ended December 31, 2007 are inclusive of 170,000 subscribers acquired through our 2007 business
combination.
Retail service revenue decreased $2.2 billion, or 8%, in 2009 as compared to 2008 and $3.6 billion, or
11% in 2008 as compared to 2007. The majority of the decline is due to a $2.8 billion and $3.5 billion decrease in
post-paid service revenue driven by a reduction in the Company’s average number of post-paid subscribers of
approximately 4.1 million and 2.7 million for the years ended December 31, 2009 and 2008, respectively. The
decline in post-paid service revenue was partially offset by an increase of $583 million in prepaid revenue for
2009 as compared to 2008, primarily driven by attracting subscribers to the Company’s National Boost Monthly
Unlimited plan, which launched in the first quarter of 2009. Prepaid revenue for 2008 decreased $92 million as
compared to 2007, primarily driven by a reduction of 256,000 in the average number of retail prepaid
subscribers, primarily on the iDEN network.
Wholesale, affiliate and other revenues, in total, decreased $397 million, or 42%, for 2009 as compared
to 2008, and $118 million, or 11%, for 2008 as compared to 2007. The decrease in 2009 was primarily due to a
decrease in the number of subscribers with two of our large MVNO operators. Wholesale revenues include a
growing number of devices under our open-device initiative, including machine-to-machine services through
devices that utilize our network. Average revenue per subscriber for our open-device machine-to-machine
services is significantly lower than revenue from other wholesale and affiliate subscribers; however, the cost to
service these customers is also lower resulting in a higher profit margin as a percent of revenue. The decrease in
2008 was primarily due to a decline in average monthly service revenue per wholesale subscriber.
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