Q4 2013 results

[WiWavelength]

That makes sense. Given Sprint's troubles, though, I would have figured it would have tried harder to retain these customers...

 

We have Sprint retail workers in the affected USCC area.  As I recall, at least one said that USCC sub coming in to switch were some of the most sub prime credit customers that he had encountered.  In other words, USCC was scraping the bottom of the barrel.  A lot of the affected subs probably were not worth it to Sprint. 

 

AJ

[Rocket87]

We have Sprint retail workers in the affected USCC area. As I recall, at least one said that USCC sub coming in to switch were some of the most sub prime credit customers that he had encountered. In other words, USCC was scraping the bottom of the barrel. A lot of the affected subs probably were not worth it to Sprint.

 

AJ

 

That was me!!! Now alot were fine, but man so many had sub prime, straight decline or already owed sprint money.

 

We treated the same as any other customer, they had their credit ran and had to buy phones and sign contracts. We had no access to info on them from USCC or anything special. All they got special was $100 off a phone and a $50 bill credit, but only if they ported in their number from USCC. They were all free to go where ever they wanted.

[gnoj]

Uhh, no. It was Sprint's choice to release them from their contracts. USCC did transfer the customers to Sprint. It was even in the press release.

 

Nowhere in that press release does it say that it was Sprint's decision (rather than USCC's) to waive those contracts. However, let's for a moment put the PR aside and consider the following:

 

1.) During the transition period (May 17, 2013 - January 31, 2014), customers continued to be billed by USCC, and experienced the same billing problems encountered by nearly all of the company's subscribers last year (duplicated or missing bills, erroneous charges, etc.). They were provided the same customer service as other USCC customers, including by reps in local stores for as long as they remained open.

 

2.) Throughout the transition, Sprint offered incentives for USCC customers to switch/port over their lines to Sprint. If these accounts already belonged to Sprint, why was it necessary to expend the money and effort to do this? As Rocket87 mentioned, no information on those customer's accounts was present in the system beyond that of any other person coming in to switch from another provider. Unlike what the PR states ("Sprint will send them additional information on the exact timing and details of the transition which will last several months."), Sprint only sent mailers of these incentive offers. All correspondence re the dates of the transition came from USCC (or so I've been told).  

 

3.) Again, at the end of the transition period, accounts were terminated rather than transferred to Sprint, due to the fact that they'd be roaming full-time. I'm not sure what happened to the phone numbers of any terminated accounts. Those may have been given to Sprint since USCC no longer has a need for phones numbers with those area codes.

 

So what happened here? Did Sprint purchase these customers, and then the next day turn around and sell them back to USCC? Unlikely, since that would also likely require approval from the FCC. No, what seems more likely is that someone who hastily wrote that PR goofed. This reminds me of all the PR's re Sprint Spark that talk about "combining" all 3 frequencies, when we know Spark really only means B41 TDD LTE, and there are naturally no plans for inter-frequency carrier aggregation. 

 

Bottom line, whatever the exact contours of this deal, it seems unreasonable to state that Sprint "churned" out these customers, when they never used the Sprint network (except for roaming), nor touched a Sprint device, unless they proactively chose to do so.

[Conan Kudo]

So what happened here? Did Sprint purchase these customers, and then the next day turn around and sell them back to USCC? Unlikely, since that would also likely require approval from the FCC. No, what seems more likely is that someone who hastily wrote that PR goofed. This reminds me of all the PR's re Sprint Spark that talk about "combining" all 3 frequencies, when we know Spark really only means B41 TDD LTE, and there are naturally no plans for inter-frequency carrier aggregation. 

 

Bottom line, whatever the exact contours of this deal, it seems unreasonable to state that Sprint "churned" out these customers, when they never used the Sprint network (except for roaming), nor touched a Sprint device, unless they proactively chose to do so.

 

According to the Public Interest Statement that Sprint and US Cellular submitted to the FCC:

The proposed transaction involves the partitioning and assignment of three 1.9 GHz PCS licenses from U.S. Cellular to Sprint, covering all or parts of 31 Cellular Market Areas (“CMAs”), along with the sale of 585,000 U.S. Cellular customers located in these areas, in exchange for $480 million and the assumption of certain liabilities. U.S. Cellular and Sprint are committed to providing a smooth transition of these customers to Sprint following Commission approval of the license assignments and transaction closing.(6)

 

The footnote referenced says the following:

U.S. Cellular customers transitioning to Sprint will enjoy the wide range of Sprint service and device offerings – including marquee devices like the iPhone and iPad, Sprint’s acclaimed push-to-talk (“PTT”) devices and services, and Sprint’s award-winning customer support. Customers will experience no service disruption in this transition as the parties will enter into a spectrum lease arrangement by which U.S. Cellular will continue to operate its 1.9 GHz PCS Network in the affected areas post-closing until Sprint and U.S. Cellular can seamlessly transition the former U.S. Cellular customers. The parties expect this process to take approximately one year.

 

 

That is exactly what happened. So Sprint absolutely "owned" those subscribers. And it churned them out. It's listed as such in its financials as well.

[Fraydog]

If they were Sprint customers then why would USCC still be billing them? Seems to me this transition was bungled a bit, also I'll note that Sprint took over USCC spectrum and didn't build out Network Vision in places that USCC had fairly rural buildout in places not far from me like Sparta, just up the road from where I live. I'm sure I'll hear back "But Ryan, those USCC customers were subprime and the area too rural." Which brings me to my second point: both companies should have done a far better job of communicating. USCC customers in Sparta had no choice but the duopoly. TMobile and Sprint has no native service there and Alltel is operating as owned by AT&T and Alltel customers are de facto AT&T customers only they roam onto Sprint when they leave Sparta and head toward the St. Louis CMA where Alltel never had service.