Are any telecom companies making money?

Huge loss by SPRINT caps plethara of disappointing telecom news

We do not think SPRINT has the financial resources to complete their WiMAX buildout plans. Instead, the WiMAX unit will likely be spun off, with INTEL, Clearwire, and private equity firms buying it. Even then, the future of WiMAX in the U.S. is in doubt- no roaming, no 700K Hz nation wide network, AT&T and Verizon Wireless passing in favor of LTE-like technologies.

The Siemens restructuring is a most striking transformation- from an enterprise network equipment provider to a software solutions supplier. The Nortel loss is not at all a surprise, as the company has been plagued by accounting irregularities for years. The NY Times states that Nortel’s scope is too broad and is the cause of continuing concern and problems. Metro PCS is attracting subscribers, but there appears to be a cellular price war in the U.S. that has destroyed profit margins. News items are listed below in chronological order- newest news first.

SPRINT posts big loss and stops paying dividend: Do you really think they’ll complete their WiMAX roll-out on schedule? Stung by defecting customers and falling sales, Sprint Nextel Corp. on Thursday posted a steep fourth-quarter loss and canceled its dividend "for the foreseeable future."

Sprint has lost tends of thousands of key customers to rivals such as AT&T Inc. and Verizon Wireless, hurt by poor customer service and lackluster selection of handsets. The company recently hired a new chief executive, Dan Hesse, to fix its ailing wireless division.

Yet Hesse said Sprint is in worse shape than he thought and that the company’s struggles won’t end anytime soon, particularly with the U.S. economy turning south.

Deutsche Telecom Narrows Net Loss


BONN — Deutsche Telekom AG posted a narrower fourth-quarter net loss, but results were weighed down by the costs of an early-retirement program to reduce the size of the company’s work force.

Meanwhile, Chief Executive Rene Obermann said Deutsche Telekom is getting closer to a deal on a partnership for its business-services unit, T-Systems. "We have made excellent progress in negotiations on the planned partnership and expect to be able to conclude an agreement shortly," Mr. Obermann said, without elaborating.

Mr. Obermann added that Deutsche Telekom is also looking for acquisition targets outside of regions where the company is present. "Acquisitions outside of our footprint are possible," he said. Deutsche Telekom focuses on markets in the U.S., the Netherlands, and Central and Eastern Europe.

MetroPCS Q4 loss widens

MetroPCS reported its fourth quarter and year-end results: Revenue grew 30 percent to $591.1 million, up from $453.1 million last year, but short of analysts’ expected $608 million. During the fourth quarter, MetroPCS posted a loss of $47.2 million, or 14 cents per share. It also took an impairment charge of $83 million to write down the value of auction-rate securities. For more on MetroPCS’ quarter: Nortel posts a loss and will cut 2,100 more jobs One day after Siemens announced plans to cut some 3,800 workers and reassign 3,000 others (see 3. below), telecom equipment vendor Nortel said it will cut 2,100 jobs as part of its turnaround efforts. Nortel reported a $957 million loss for 2007, largely because of a huge accounting adjustment. The fourth quarter net loss was $844 million, or $1.70 a share, compared with an $80 million loss this time last year. Revenue fell 3.7 percent for the quarter to $3.2 billion, while the company had expected flat revenue with $100 million wiggle room. The job cuts constitute a 6.2 percent reduction in its global workforce, but it also plans to move some 1,000 jobs to "higher growth and lower cost geographies." Nortel plans to sell some of its real estate assets as well. The changes should help the company save $300 million a year. For more on Nortel’s troubles:

Siemens to refocus telecom equipment unit on software solutions, EE Times

Siemens AG has confirmed reports it plans to lay off about 6,800 workers globally in its enterprise communications equipment business and outsource all manufacturing activities as it transitions the division to a software and services business. The company said its wholly-owned Siemens Enterprise Communications GmBH would eliminate a total of 3,200 positions in Germany and another 3,600 globally with most of the cuts occurring in manufacturing and administrative support. But there’s more……………………………………………

Siemens cuts 6,800 jobs, plans plant sales at Enterprise Telecom Division

Siemens AG, Europe’s biggest engineering company, will cut 6,800 jobs at the corporate telecommunications unit after failing to find a buyer for the division for almost two years. Siemens will eliminate about 3,800 jobs directly, and about 3,000 will be cut by selling factories or setting up partnerships, the Munich-based company said in a statement today. About 3,200 jobs are affected in Germany, according to Siemens. The company will exit manufacturing sites from Germany to Brazil.“Something had to happen as the unit just doesn’t fit into the company’s portfolio anymore,” Michael Bahlmann, an analyst at M.M. Warburg who recommends buying the stock, said in a telephone interview. “The job cuts will hopefully make it easier to sell the business.”

The harsh telecommunications market has caused massive layoffs at Siemens Enterprise Communications GmbH & Co. The wholly owned subsidiary of Munich, Germany-based Siemens AG today announced a restructuring plan that calls for massive job cuts as it moves from being a hardware supplier to a software and solutions provider. SEN noted the "dramatically changing" telecommunications market for enterprise solutions. Indeed, falling prices and mounting competition from low-cost-labor countries such as China have increased the pressure on European-based telecom players. The company said that the market’s flux has made the transformation "absolutely essential" and that the shift supports Siemens’ ongoing efforts to find a suitable partner for SEN. "We will begin accelerating the reorientation of SEN and the related restructuring activities under the control of Siemens to ensure that personnel measures associated with these changes will be as socially compatible as possible," Siemens CFO Joe Kaeser said in a statement. ———————————————————————————————————

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