uploads///Telecom Q Postpaid Phone Churn_Peers

How Sprint’s Q4 Postpaid Phone Churn Rate Compares to Peers

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May. 14 2019, Published 3:28 p.m. ET

Sprint’s postpaid phone churn rate

In this part, we’ll discuss Sprint’s (S) customer retention metric, the churn rate. Sprint’s postpaid phone churn rate is the highest in the US wireless industry. The company’s postpaid phone churn rate rose YoY in the fourth quarter of fiscal 2018 (the quarter ended in March 31).

In the fourth quarter of fiscal 2018, Sprint reported a postpaid phone churn rate of 1.82% as compared to 1.68% in the fourth quarter of fiscal 2017. The YoY increase was mainly driven by subscribers rolling off promotional offers.

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A rise in the churn rate is negative for wireless carriers because they have to deal with additional acquisition costs, which in turn has an adverse impact on their operating margins. As a result, an increasing churn rate could be a cause of concern for investors.

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Peer comparison

In comparison, AT&T (T) posted a postpaid phone churn rate of 0.93% in the quarter, which ended on March 31, while T-Mobile (TMUS) reported a record-low postpaid phone churn rate of 0.88%.

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