Sprint - Nextel 2015 Annual Report Download - page 43

Table of Contents
Subscriber Results
SprintPlatformSubscribers
Retail Postpaid —During the Successor year ended March 31, 2016 , net postpaid subscriber additions were 1,245,000 compared to net losses of
212,000 and 96,000 in the Successor year ended March 31, 2015 and the Combined year ended December 31, 2013 , respectively, inclusive of 545,000 , 1,334,000
, and 564,000 net additions of tablets, respectively, which generally have a significantly lower ARPU as compared to other wireless subscribers. During the
Successor three-month transition period ended March 31, 2014, net postpaid subscriber losses were 231,000 compared to net additions of 12,000 in the Predecessor
three-month period ended March 31, 2013, inclusive of 516,000 and 16,000 net additions of tablet devices, respectively. The primary driver for the net additions in
the Successor year ended March 31, 2016 was our pricing plan promotions launched during the year combined with improvement in churn as subscribers benefit
from the improved network quality. The primary driver for the net losses in the Successor year ended March 31, 2015 , the Successor three-month transition period
ended March 31, 2014 and the Combined year ended December 31, 2013 was an increase in churn, primarily due to increased competition and network-related
churn impacted by our network modernization program. Aggressive marketing efforts by other wireless carriers, including price reductions, to incent subscribers to
switch carriers also negatively impact churn, which has a negative effect on earnings. Nextel platform and U.S. Cellular recaptures in the Combined year ended
December 31, 2013 totaled 734,000.
Retail Prepaid —During the Successor year ended March 31, 2016 , we lost 1,309,000 net prepaid subscribers compared to adding 449,000 and
488,000 net prepaid subscribers in the Successor year ended March 31, 2015 and Combined year ended December 31, 2013 , respectively. The net losses in the
Successor year ended March 31, 2016 were primarily due to subscriber losses in the Virgin Mobile prepaid brand primarily due to increasing competition. Net
additions in the Successor year ended March 31, 2015 were primarily due to subscriber growth in our Boost brand as a result of new promotions in our indirect
channels, partially offset by subscriber losses in the Virgin Mobile prepaid brands primarily due to continued competition. During the Successor three-month
transition period ended March 31, 2014, we lost 364,000 net prepaid subscribers compared to adding 568,000 in the Predecessor three-month period ended March
31, 2013, primarily due to the timing and impact of churn related to the annual recertification of Assurance Wireless subscribers occurring earlier in calendar year
2014 compared to calendar year 2013, combined with a decline in gross subscriber additions across all prepaid brands. Net additions in the Combined year ended
December 31, 2013 were primarily due to subscriber growth in our Boost prepaid brand, partially offset by the deactivation of subscribers related to new federal
regulations and a one-time recertification of all Assurance Wireless subscribers in 2012.
The federal Lifeline program under which Assurance Wireless operates requires applicants to meet certain eligibility requirements and existing
subscribers must recertify as to those requirements annually. Regulations adopted in 2012, which impact all Lifeline carriers, imposed stricter rules on the
subscriber eligibility requirements and recertification. These new regulations also required a one-time recertification of the entire June 1, 2012 subscriber base by
December 31, 2012. Accounts of subscribers who failed to respond by December 31, 2012 were suspended and made subject to our prepaid churn rules as
described below (or 365 days in a limited number of states). However, subscribers could re-apply prior to being deactivated and also had the ability to receive by-
the-minute service at their own expense. We deactivated the accounts of approximately 1.2 million subscribers in the quarter ended June 30, 2013 primarily related
to the recertification process.
Prepaid subscribers are generally deactivated between 60 and 150 days from the later of the date of initial activation or replenishment; however, prior to
account deactivation, targeted retention programs can be offered to qualifying subscribers to maintain ongoing service by providing up to an additional 150 days to
make a replenishment. Subscribers targeted through these retention offers are not included in the calculation of churn until their retention offer expires without a
replenishment to their account.
Wholesale and Affiliate Subscribers — Wholesale and affiliate subscribers represent customers that are served on our networks through companies that
resell our wireless services to their subscribers, customers residing in affiliate territories and connected devices that utilize our network. Of the 13.5 million Sprint
Platform subscribers included in wholesale and affiliates, approximately 64% represent connected devices. Wholesale and affiliate subscriber net additions were
2,733,000 during the Successor year ended March 31, 2016 , compared to 2,349,000 and 31,000 during the Successor year ended March 31, 2015 and the
Combined year ended December 31, 2013 , respectively, inclusive of net additions of connected devices totaling 2,743,000 , 1,950,000 , and 908,000 , respectively.
The primary driver for net additions in the Successor years ended March 31, 2016 , March 31, 2015 and the Combined year ended December 31, 2013 is primarily
attributable to growth in connected devices. Net additions were 212,000 during the Successor three-month transition period ended March 31, 2014 compared to net
losses of 224,000 during the Predecessor three-month period ended March 31, 2013, inclusive of net
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