Will Sprint suffer holiday jitters with its customer base after walking from T-Mobile?
There was marked disappointment on Wall Street when Sprint and T-Mobile quit merger negotiations last month. There’s been a consensus forming that Sprint has ended up the loser of this deal and will pay heavily over the course of the next few years as it tries to compete with the insurgent Un-carrier.
But for this fourth quarter, there’s at least a bit of calm. CFO Tarek Robbiati told UBS investors that he expects Sprint’s customer defection rate — its churn — to rise by 15 basis points over last quarter to 1.89 percent. This forecast is an improvement from the 20-point rise recorded this time last year, though general churn has increased in the past year. The holidays typically bring the biggest deals and, thus, high cross-winds in the industry that bring up churn rates all over.
“We are going to every market, figure out what are the root causes [of customer defection] and address that,” Robbiati said.
T-Mobile, on the other hand, continues to drop its churn rate to historically low levels with the last record of 1.23 percent in the third quarter.