Sprint Canada signs up 9,000 wireless/wireline bundle customers in five weeks

Sprint Canada Inc. spent $2 million to sign up 9,000 subscribers to its new wireless/wireline bundle in the first five weeks following the launch of the initiative in mid-September (RoW, Sept. 9/03), and may have to spend more on capital and operating expenses than it previously anticipated. Sprint, which unveiled the bundle in conjunction with Microcell Telecommunications Inc. in July, secured sales to about 2,600 subscribers in the last two weeks of Q3 with the balance of the 9,000 coming in the first three weeks of October. Bill Linton, president and CEO of Sprint’s parent company Call-Net Enterprises Inc., said during a conference call with analysts and media October 30 that while Q3 revenue from the bundle is still insignificant, sales to date to existing and new customers have far exceeded management’s forecasts. "To that end, we are continuing to develop innovative offers and bundles for Canadian consumers and business enterprises. The consumer uptake for our competitive offer shows that Canadians are prepared to embrace choice and innovation despite the best efforts of the ILECs to maintain their monopoly," Linton stated. Sprint recorded about $100,000 in revenue associated with the wireless/wireline bundle. However, the company had $640,000 in carrier charges and $1.3 million in operating expenditures relating to the offer. Linton said the discrepancy is a result of handsets and various accessories purchased prior to the launch of the program. Those products were needed for testing to prepare the offering for commercial launch. The company recorded local telephone subscriber additions for the quarter ended September 30 of 29,000 local lines, with 18,000 in the residential segment and 11,000 in the business sector. When asked how many of the total number of wireless/wireline bundle subscribers were new net local subscriber additions, Linton refused to disclose that information. "The only thing that we’re saying is that sales continue to be very robust across all of our segments in October," he said. "If it continues at this rate we are going to have a quarter of gains equal to or better than what we just had." The company also noted in the conference call that due to strong subscriber growth in local and wireless, it may have to revisit capital expenditure requirements for the remainder of 2003 to address capacity. "Compared to previous quarters, we may have to invest greater amounts in the operating and capital expenditures related to new subscriber additions," Linton said. In the future, the company’s wireless component could get an even greater push depending on the outcome of a CRTC proceeding on resale DSL rates. Linton said that the outcome of the decision will likely guide the direction in which the company throws its marketing dollars. If the decision is favourable and the economics work, Linton said, Sprint would look to offer DSL on a resale basis. "If not, we will study and make a determination on whether to do it on our own network. It’s not a technical issue. It’s a matter of whether our money is (better) spent promoting a larger bundle and selling DSL to existing customers. Or do we spend our money attracting new voice subscribers with our wireless/wired bundle?"

Sprint Canada signs up 9,000 wireless/wireline bundle customers in five weeks

News | 11/05/2003 5:00 am EST

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