With so much of the telecom industry's attention focused on the financial performance of Sprint's wireless networks, it's easy to wonder if anyone remembers that its wireline revenues are also declining. During the second quarter, the service provider reported that wireline revenue, which consists of traditional long-distance voice, business services and backhaul operations, dropped 11 percent to $1.4 billion. Sprint attributes the losses in its wireline business to the trend of end-customers abandoning their legacy landline voice providers for wireless and Internet voice providers such as Skype and Vonage.
On the legacy services side, there weren't many surprises. Legacy voice revenues dropped 2 percent sequentially and 18 percent year-over-year, while legacy data revenues declined 14 percent sequentially and 32 percent when compared to Q2 2008. Sprint said the decline in legacy data revenues reflects its customer's ongoing transition to IP services.
Despite the initial bleak outlook, Sprint did see some positive, if small, gains in the wireline segment. Sprint reported that Internet revenues during the second quarter rose 1 percent sequentially and 10 percent from 2008. Sprint said demand for Global MPLS services from its enterprise customers, as well as an increase in subscribers that are using the company's VoIP services it resells through its cable partners drove the year-over-year growth. Cable VoIP continues to be a good performer for Sprint. As of the end of the second quarter, Sprint reported it was serving about 4.7 million VoIP customers.
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