Sprint Nextel swings to a $29.5 bln 4Q loss

BEIJING, Feb. 29 (Xinhuanet) -- A continued loss of customers to competitors and a write down of most of the remaining value of its 2005 purchase of Nextel Communications Inc. swung Sprint Nextel Corp. to a fourth-quarter loss of 29.5 billion U.S. dollars.

America's third largest wireless carrier said it would quit paying dividends for the foreseeable future and was tapping a revolving credit line. Its shares tumbled 8 percent in morning trading.

Chief Executive Officer Dan Hesse, who was hired in December to turn the company around, said the quarter was more difficult than he had expected and it could be some time before proposed operational changes have any effect.

During a conference call with analysts, Hesse predicted the company would lose 1.2 million valuable customers who sign an annual contracts during the first quarter and would see additional losses in the second quarter.

To counteract customer losses, Hesse said Sprint Nextel would begin offering unlimited voice and data service usage for 99.99 dollars per month. Unlimited voice only would cost 89.99 dollars per month, undercutting 99.99 dollar unlimited calling plans announced last week by rivals Verizon Wireless and AT&T.

Sprint Nextel also said that due to instability in the capital credit markets the company was borrowing from a revolving credit facility and was not declaring dividends for the "foreseeable future."

Sprint reported losing $29.5 billion, or $10.36 per share, during the quarter ending Dec. 31. By comparison, Sprint Nextel earned $261 million, or 9 cents per share, during the same period a year ago.

Not including the write-down and other one-time charges, the company said it would have earned 21 cents per share before amortization, which was higher than the 18 cents per share expected by analysts surveyed by Thomson Financial.

(Agencies)