Sprint's ( S) woes intensified at year-end as mobile phone subscribers fled en masse. The
flailing No.3 wireless shop is expected to report that it lost more than a half million customers in the fourth quarter, say analysts and industry watchers. Unlike other players feeling squeezed by competition, Sprint can't blame a softening economy for its steepening plunge. Rival AT&T ( T) is expected to report blowout subscriber gains and No.2 Verizon Wireless -- co-owned by Verizon ( VZ) and Vodafone ( VOD) -- is likely to add another big win to its robust growth record. In its third quarter, Sprint lost 337,000 subscribers, an alarming rate given the strength of the wireless market. But Sprint's losses have been a big gain for rivals. Thanks to a strong phone lineup including Apple's ( AAPL) iPhone and a big push in its prepaid business, AT&T hooked upwards of 2.4 to 2.7 million net new users in the fourth quarter, according to research notes Thursday from Cowen and Bear Stearns. Analysts expect Verizon to post a solid 1.9 million subscriber gain. Sprint's latest disappointment will be an especially hard test of already skittish investor loyalty since the company will offer no assuring business forecast, say observers. Sprint plans to postpone financial guidance until spring, after new CEO Dan Hesse completes a sweeping strategic review.
A Sprint representative declined to comment on fourth-quarter numbers, adding that "we are preparing our earnings report for next month." Sprint has not yet scheduled an earnings release date. Sprint's two-year post-Nextel merger slide hasn't exactly slowed down. The stock has fallen 21% in the past month even as the board picked a capable successor to ousted CEO Gary Forsee. "At $12, it's trading at asset value at this point, and I still can't say that it has reached a bottom yet," says one telecom investor who has no Sprint position. The company has put a freeze on all new deals and development in its crucial WiMax wireless network effort, say people familiar with the moves. Hesse has been scheduling sitdowns with each of his top managers as he attempts to put a plan together, one source says. Analysts and sources close to the company expect Hesse to announce a major management shakeup and a shift of headquarters back to Kansas. If true, the consolidation in Sprint's home campus will spell even more neglect for the Nextel side of the company. Sprint shares were recently up 4 cents to $12.38 Thursday.