the Troll has awakened

The Troll has been on vacation for a while, but since he was called out in a SprintConnection post, the Troll has awakened.

The Troll has always felt Sprint had a solid network and the JD Powers report reflects this. This makes it even more perplexing as to why S is in the position it is in. Can you say Dumb Cowards? The Troll does find it intriguing how passionate the S lovers are to grab on to any piece of good news. As the Troll has said before, S will be bankrupt, or very close to it, within two years. The Powers report may be good news, but where are the news reports about subscriber losses, lower ARPU, iPCS suit implications, 20 Billion Dollars of debt, Clearwire impairments, lack of investment in infrastructure….do you want the Troll to go on?

Out of Sprint, Verizon, AT&T, Metro PCS, Leap, and T Mobile which is the only company to have lost subscribers in 2008? Sprint, with about 5 million. Which is the only company expecting more losses in 2009? Sprint again. But the spin is that S will lose less than in 2008, perhaps 4 million? And this is a good sign? Which company has the highest churn? Sprint. Which company has the most decline in ARPU? I’ll let you figure that one out. Meanwhile, AT&T and Verizon are investing huge amounts in network upgrades while Sprint is cutting their budget in half, outsourcing network ops, and laying off big numbers. Do you think things are going to get better?

The answer is it can’t get better. Sprint’s own management is expecting major declines in revenues and subscriptions in 2009, despite desperate attempts to cut costs. The iPCS lawsuit will force major subscription losses or result in some sort of heavy cash settlement. A little discussed fact is that S is again taking on poor credit customers. At $500 per head, this will have even worst results in today’s economy than it did under Forsee. Sprint’s investment in Clearwire, almost $8 billion worth, has declined by more than 75%. The other partners have already taken impairment charge and S will be forced to do the same. As a result, Sprint’s debt ratio will suffer and S debt holders will be able to exercise covenants that will result in higher payments or, if things are really bad, force a sale or bankruptcy filing. Any impact from the bug-laden Pre will be short-lived and be more than offset by customer defaults. Verizon will be selling it by this time next year anyway. Unfortunately, the small strides in customer service and network ratings are inconsequential at this point.

The biggest indicator of Sprint impending demise however is the behavior of the Dumb Cowards. We have already seen KW take a package (illegally I may add). Others including Hesse, Brust, and Elfman have structured their contracts and bonuses for hefty payouts over the next two years, with the Board’s complicit negligence. Moreover, Hesse likes to talk about having enough cash to get through the next two years, but you notice he does not talk about Sprint’s future beyond this time. With the media these days talking about the likes of AIG and Bernie Madoff, it’s hard not to liken them to the Dumb Cowards who are systematically robbing this company’s coffers.