Wireless carriers T-Mobile and Sprint are anxiously awaiting U.S. District Judge Victor Marrero’s ruling in their trial against a group of states attorney who are trying to block their $26 million merger—and for Sprint, the ruling cannot come soon enough. The company lost 115,000 postpaid phone connections during the final quarter of 2019 while waiting for the merger to be approved, according to The Wall Street Journal.
Sprint also lost 91,000 of the same connections the quarter before and 26,000 during the same time in 2018. The losses are big ones for Sprint as postpaid customers are deemed lucrative because of their tendency to pay their bills consistently under long-term contracts. Postpaid customers are also less likely to change carriers.
Unfortunately for Sprint, the subscriber loss is not a new trend. The carrier has lost postpaid phone subscribers every quarter since the end of 2018, according to The Wall Street Journal. Customers’ departure is partly due to Sprint ending some of its bigger promotions. Meanwhile, the company’s bigger rivals have drawn in new customers. Sprint’s potential partner T-Mobile said it added 1 million postpaid customers during 3Q 2019. AT&T and Verizon are expected to announce their respective performances this week.
T-Mobile-Sprint merger ruling hangs in the balance
Sprint and T-Mobile made their closing arguments in its case against the state attorneys general looking to block their deal on January 15. There’s no timetable on when Judge Marrero will make his ruling, but it could be in the coming weeks, according to The Wall Street Journal. Even if the judge rules in their favor, Sprint and T-Mobile’s fight to merge might continue—the California Public Utilities Commission has yet to approve the deal and has until July to vote on it.
In April, it will be two years since Sprint and T-Mobile announced their merger. Since that time, Sprint’s postpaid churn, its ability to retain customers, moved up to 2.06 percent in the most recent quarter from 1.84 percent during the same time span the year before. Sprint’s 2.06 percent po
stpaid phone churn is the highest it has been since the carrier started disclosing the metric in 2015, The Wall Street Journal reports. Meanwhile, T-Mobile’s churn for its branded customers was 1.01% during 4Q 2019.
Sprint turns it focus towards mobile devices
Now, Sprint has put its attention towards adding more devices per current account like smart watches, company management said in an investor update. The move is made as the carrier has decreased its promotions, which have often led to customers leaving once their promotion expires. According to The Wall Street Journal, Sprint added 609,000 net new data device connections like tracking devices and wearables during 4Q 2019—a 335,000 connection increase from the final three months of 2018. The devices tend to cost less than smartphones, but come with recurring monthly charges that Sprint management wrote, “(have) the potential to deliver improved economics to Sprint and ultimately our shareholders.”
Sprint ended last year with 33.8 million postpaid and 8.3 million prepaid connections and reported a quarterly net loss of $120 million on revenue of $8.1 billion, according to The Wall Street Journal.