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Will 2007 Tame Sprint Nextel Churn Albatross?

Strategy Analytics has some good news for SprintNextel, which has had a challenging year. The Boston-based analyst firm recently published a report which analyzed SprintNextel's plans to tame the 'churn albatross' and roll out ultra high-speed mobile services, and concluded that the 2007 outlook is positive.

SprintNextel's inability to hold onto its subscribers, as evinced by its terrible churn rate compared to other U.S. carriers, may finally be at an end. At its recent analyst event, Sprint gave details of plans to retain its best customers and make the experience of being a Sprint customer much more appealing.

"SprintNextel has taken a very can-do attitude toward resolving its problems," commented Sara Harris, Senior Industry Analyst at Strategy Analytics and author of the report. "Although no-one should expect overnight results, the combination of targeted capex to address network quality issues (notably in IDEN hotspots), the rollout of hybrid IDEN/CDMA handsets and a commitment to messaging the strength of the SprintNextel brand via the 'Power Up' campaign will yield medium term results."

David Kerr, VP of the Global Wireless Practice, added, "SprintNextel must act on its plans to simplify the business, engage disenchanted Nextel channel members and aggressively spend on marketing to overcome the Verizon Wireless 'its the network' media blitz. Success in these short term imperatives will allow SprintNextel to differentiate itself long-term as a media content, industry-friendly brand supporting cost effective transport solutions for multimegabit video, TV and broadband value propositions."

Disclosure: I am a longtime Sprint PCS customer, but I do not own their stock. I'm currently limited to using a legacy 2G handset from Sanyo (SCP-4500), because it was the only handset that would work reliably in my home office. Truly, they went out of their way to help me select this device, and I only have good things to say about Sprint. Regardless, hopefully in 2007 I can use a 'smaller' and equally reliable mobile phone with their service.

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