Sprint Still Looks Winded

Sprint's (S Quote) downhill run is still picking up speed.

The Reston, Va., wireless shop has just closed books on what analysts predict could be the worst quarter of a largely dismal 2006. Sputtering on all cylinders, Sprint appears poised to keep losing ground until the second half of this year.

Sprint's list of woes, which earned it the coveted No. 3 spot in TheStreet.com's Five Dumbest Things on Wall Street This Year, grows larger by the month. The integration of Nextel has gone from challenging to a disaster by some estimates as once-loyal high-paying customers go elsewhere. Sprint's monthly defection rate stands at 2.4% as of the third quarter, up from 2.1% from the second quarter.

That industry-worst churn rate is likely to grow when the company releases its fourth quarter results. It seems that in addition to the cancellations and the cleanout of nonpaying customers, Sprint's wholesale business is also dragging down the results.

Virgin Mobile, which sells Sprint wireless under its own brand, has seen growth cool down. Based on Virgin Mobile's fourth-quarter numbers, Bank of America analyst Dave Barden estimates that Sprint added 230,000 total net wholesale subscribers. That's up 30% from the prior quarter but far below the 160% sequential growth in the year-ago quarter.

As the No. 3 player behind Cingular, AT&T's (T Quote) wireless unit, and Verizon Wireless, jointly owned by Verizon (VZ Quote) and Vodafone (VOD Quote), Sprint is already slightly disadvantaged. And making it worse, the company can't seem to catch a break.