Sprint PCS thrives in troubled economy

(Telephony) Sprint PCS didn't feel any effects of a slowing economy during the first quarter. The company exceeded Wall Street's expectations by adding 875,000 customers and increasing its average revenue per user (ARPU) and operating cash flow.

"Customer growth remains strong," said Sprint PCS President Charles Levine. "It's a notable achievement given the current microeconomic environment."

Monthly ARPU reached $60 during the quarter, a 6% increase from the previous year, while net operating revenues increased 68% to $2.05 billion in the first quarter from $1.22 billion a year ago. Operating cash flows were $253 million for the quarter, a $434 million increase from the previous year.

The carrier also increased its business customer base by 73% during the quarter compared to a year ago. Fueling the growth was Sprint PCS's Wireless Web for business, wireless products and services for the enterprise market that offers corporate email and other enterprise-related offerings. Overall, wireless data usage increased more than 30% from the fourth quarter, with data contributing $1 to ARPU.

However, Sprint PCS remains cautious about the economy.

"Signs of a slower economy were evident in the first quarter, and, despite the PCS Group's outstanding results, we continue to view the near term with a certain degree of caution," said Ronald LeMay, president and chief operating officer of Sprint Corp. "If industry penetration was to swing 100 basis points in either direction, it could impact our net additions by 300,000 to 350,000."