Sprint - Nextel 2008 Annual Report Download - page 38

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Average Monthly Service Revenue per Subscriber
Below is a table showing average revenue per retail post-paid and prepaid subscriber for the past twelve quarters.
Quarter Ended
March 31,
2007
June 30,
2007
September 30,
2007
December 31,
2007
March 31,
2008
June 30,
2008
September 30,
2008
December 31,
2008
March 31,
2009
June 30,
2009
September 30,
2009
December 31,
2009
Average
monthly service
revenue per
subscriber(1)
Post-paid ............ $59 $60 $59 $58 $56 $56 $56 $56 $56 $56 $56 $55
Prepaid ............. $32 $31 $30 $28 $29 $30 $31 $30 $31 $34 $35 $31
(1) Average monthly service revenue per subscriber for the quarter is calculated by dividing quarterly service revenue by the sum of the average numberof
subscribers for each month in the quarter. Changes in average monthly service revenue reflect subscribers who change rate plans, the level of voice and data
usage during a quarter, the amount of service credits which are offered to subscribers, plus the net effect of average monthly revenue generated by new
subscribers and deactivating subscribers.
Average monthly post-paid service revenue per subscriber was stable throughout 2008 and most of 2009 as a result of
improved retention of higher revenue subscribers on bundled rate plans offset by lower overage and roaming revenues. During
the fourth quarter 2009, the Company experienced a decline in average monthly post-paid service revenue per subscriber due to
declines in overage revenues resulting from the increased popularity of fixed-rate bundled plans including the Any Mobile
Anytime feature. The decline in average monthly retail post-paid service revenue per subscriber in 2007 was due to the loss of
iDEN subscribers with higher priced service plans and the migration of iDEN subscribers to lower priced plans. Our average
monthly service revenue per subscriber in 2007 also declined due to other reasons, the most significant of which is the number
of service credits accepted by our subscribers on both networks, which increased due to our retention efforts. Average monthly
prepaid service revenue per subscriber increased during 2009 as compared to 2008 due to higher revenue from our National
Boost Monthly Unlimited users combined with more stable average revenue per subscriber from our traditional prepaid users.
During the fourth quarter 2009, average monthly prepaid service revenue per subscriber was reduced by the addition of Virgin
Mobile subscribers which carry a lower average revenue per subscriber compared to Sprint’s other prepaid subscribers.
Net Additions to (Losses of) Subscribers
The wireless industry is subject to intense competition to acquire and retain subscribers of wireless services. Most
markets in which we operate have high rates of penetration for wireless services. Wireless carriers accordingly must attract a
greater proportion of new subscribers from competitors rather than from first time subscribers. As a result, wireless carriers
have focused on retaining valued subscribers through various means including considerable efforts in customer care. Our
retention efforts have been focused on improving the customer experience, including, but not limited to, our Simply Everything
bundled plans that provide unlimited voice, data, text and Nextel Direct Connect®services; improved service levels from our
customer care centers; and our Ready Now program.
As discussed above in “Overview,” we have endeavored to retain and attract subscribers by taking actions to improve
our customer care, sales and distribution functions, and brand awareness. In addition, we have taken other actions in an effort to
improve our subscribers’ experience including improving our network performance by adding capacity to our networks,
broadening our device portfolio, and providing subscribers an excellent value proposition with our Simply Everything®pricing
plans and our Everything Data plans which include our new Any Mobile, AnytimeSM feature. While certain indicators suggest
that we are making progress with respect to these actions, we have continued to lose valuable post-paid wireless subscribers.
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