Sprint's Q1 wireline results illustrate IP network growing pains

Sprint's (NYSE: S) wireline unit once again showed the inevitable near-term losses all wireline providers are seeing as customers migrate off off TDM-based services to IP in Q1 2010.

Evidence of these growing pains can be seen right in Sprint's wireline revenue report. During the first quarter, Sprint reported $1.3 billion in wireline revenues, an 11 percent year-over-year decrease. Not surprisingly, Sprint attributes the decline in wireline revenues to reduced voice volume and rate, customer migration from legacy data (ATM and Frame Relay) to IP, and rate pressure on IP services.

On the operating expense side, there was some improvement. The service provider reported total operating expenses of $1.1 billion were a 17 percent year-over-year improvement due to declining costs of service as IP becomes a bigger piece of its wireline base and improved SG&A expenses. However, operating expenses were down seven percent due to reduced voice volume and rate changes.

Whatever wireline losses it did suffer, Sprint's aggressive IP network build out again enabled it to drive down wireline capital spending. Sprint's wireline capex was $56 million in Q1 2010 versus $77 million in Q1 2009.

For more:
- see the release here
- FierceWireless covers the wireless side here

Related articles:
Sprint's wireline woes continued in Q4 09
Sprint Wholesale loses Time Warner Cable voice contract
Sprint's wireline revenues down once again in Q3
Sprint Wholesale to trim workforce

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