Sprint PCS subscriber growth cut by upwards of 15%

Sprint announced that subscriber growth for Sprint PCS would miss its full-year target of 3 million by as much as 15% due in part to discounted pricing by its competitors. Second-quarter net customer additions are expected to be 300,000.

Unlike some of its competitors, Sprint has declined to cut prices in its wireless unit and has indicated that corporate customers were deferring purchases because they are waiting for next-generation high-speed mobile services.

Sprint PCS expects to report EBITDA of at least $800 million in Q2 and earnings per share of 33 cents, which is in line with Wall Street’s estimate.

Legg Mason, in a report, said it believes Sprint PCS will miss the mark for Q2 subscribers because it is placing almost all of its growth expectations on its summer 1xRTT launch.

As a result, the firm downgraded its rating on the carrier’s shares to sell from hold, believing it could take a few more quarters before investors regain confidence in the Sprint business model.

--Kelly Carroll, Staff Writer