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Struggling Sprint Reports Huge Loss
The Washington Post ^ | February 29, 2008 | Zachary A. Goldfarb

Posted on 02/29/2008 6:44:37 PM PST by FoxInSocks

Sprint Nextel yesterday reported a $29.45 billion fourth-quarter loss and said legions of subscribers continue to abandon its service, many because they can't pay their bills.

The nation's third-largest wireless carrier last year courted people with poor credit to boost its number of subscribers. Now the company is feeling the pain disproportionately as the economy weakens and consumers default on their debts.

Sprint said it expects 1.2 million wireless subscribers to drop their service in the current quarter, roughly the same number that left in all of 2007. The company offset losses by signing up new customers, but it has steadily lost ground to its two main rivals, Verizon Wireless and AT&T.

<snip>

Sprint yesterday announced its latest effort to recruit more customers, a $99.99 unlimited voice and data plan. Sprint has been searching for ways to differentiate itself from its competitors, much as AT&T got a leg up by making an exclusive deal to carry the Apple iPhone.

Sprint has struggled since it purchased Reston-based Nextel in 2005. The two cultures did not blend well and customers complained about the quality of Sprint's service.

<snip>

He said the company loosened its credit requirements last summer to attract customers with poor or little credit histories. Sprint ended the year with 53.8 million total subscribers, 700,000 more than it had in 2006. It made up for the loss of core monthly contract subscribers by adding less-lucrative prepaid and wholesale accounts.

"We have a lot of subprime customers in our customer base and we were disproportionately hit hard versus other carriers," Hesse said.

<snip>

Analysts referred to Hesse's strategy as a "kitchen sink" approach: presenting the bleakest picture possible in hope of showing progress in the coming months.

<snip>

(Excerpt) Read more at washingtonpost.com ...


TOPICS: Business/Economy
KEYWORDS: nextel; sprint; telecom
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I wouldn't think that a sophisticated American corporation could not foresee the consequences of extending credit to such a risky pool. They made some money in the short run, but now the company is obviously hurting.

At least the federal government hasn't intervened to save all the poor people from having their latest-and-greatest cell phone service cut off. Yet.

Regarding their newest recruitment idea, I'm skeptical that people will flock to Sprint and and sign up for $100/month contracts, but hey, I'm a simple guy.

As an aside, my own experience with Sprint over the past six years or so has been trouble free. <knock on wood> I've stayed with them primarily because I can't get a comparable rate elsewhere, but I'm starting to wonder (again) how much longer Sprint will be around.

1 posted on 02/29/2008 6:44:39 PM PST by FoxInSocks
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To: FoxInSocks

This is almost as good as Circuit City. They fired their sales force and then wondered why sales plummeted.


2 posted on 02/29/2008 6:46:43 PM PST by proxy_user
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To: FoxInSocks

Just damn! Does this mean the NASCAR cup will be changing it’s name again next year!!!


3 posted on 02/29/2008 6:48:26 PM PST by saganite (Lust type what you what in the “tagline” space)
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To: FoxInSocks

They need a unliminted 25 dollar plan.


4 posted on 02/29/2008 6:48:53 PM PST by winodog (We have been set up for Hillary)
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To: FoxInSocks

I am from the Overland Park Kansas area where Sprint has its prison looking headquarters and I can tell you this—it is a very poorly managed company and people are leaving not because they cannot pay the bills but because they can’t get service in many locations.........it makes them upset..........


5 posted on 02/29/2008 6:49:26 PM PST by yldstrk (My heros have always been cowboys--Reagan and Bush)
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To: FoxInSocks
We have a lot of subprime customers in our customer base and we were disproportionately hit hard versus other carriers,"

Maybe if these phone companies offered decent rates and didn't try to lock people in, they wouldn't have to dig for people with bad credit.

6 posted on 02/29/2008 6:50:31 PM PST by Lijahsbubbe
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To: FoxInSocks

Didnt Sprint just make a huge acquisition of another carrier a little while ago? I would think purchasing that would make its debt for the quarter look alot worse than what it really is.


7 posted on 02/29/2008 6:52:19 PM PST by aft_lizard (born conservative...I chose to be a republican)
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To: proxy_user

My problem with Sprint was their tech support. Everytime I called I got someone in Bangladesh who couldn’t speak English.

I also don’t like the fact that anytime I change my plan they extend my contract. They need to let me roll over my minutes too maybe. Something different.

They try to keep their customers by not letting them get out of their contracts instead of offering something to stay.


8 posted on 02/29/2008 6:52:23 PM PST by queenkathy (I will never give up and I will never give in)
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To: FoxInSocks
Sprint was just about the worst cellphone company to work with ~ one of their problems was communicating with customers about bill payment problems.

I had dozens of cellphones in the hands of our auditors, and if there were any problems at all (which would arise internally at the special sites where the organization made payments) Sprint made itself IMPOSSIBLE TO CONTACT.

It seemed to be their attitude that the only purpose customers had was to perfectly meld with their billing cycle and just shut up.

That, of course, was the wrong way to treat a federal agency with its own armed officers of the law, but they didn't care.

I doubt they've improved.

It's good they will soon disappear from "the corporate world". Bwahahahahaha!!!!!!!!!!!!!!!!!!11

9 posted on 02/29/2008 6:52:31 PM PST by muawiyah
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“They made some money in the short run, but now the company is obviously hurting.”

In my limited experience of 38 years of Corporate endurance ‘short run’ is usually rewarded far more than long term gains.

The Japanese have done the opposite since perhaps the 50s.

Just sayin’

10 posted on 02/29/2008 6:52:55 PM PST by elpinta (Tagline temporarily out of service)
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“They made some money in the short run, but now the company is obviously hurting.”

In my limited experience of 38 years of Corporate endurance ‘short run’ is usually rewarded far more than long term gains.

The Japanese have done the opposite since perhaps the 50s.

Just sayin’

11 posted on 02/29/2008 6:52:59 PM PST by elpinta (Tagline temporarily out of service)
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To: aft_lizard

They bought Nextel in 05. ALL of the resulting ripples from that should have settled by now.

And Sprint service continues to suck.


12 posted on 02/29/2008 6:53:39 PM PST by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: FoxInSocks
Didn't AT&T just layoff 4000 workers and close 1200 stores? I thought I saw that back in January.

I'm very happy with VZW and wouldn't think of switching.

After Altel gets bought and auctioned off, I think Sprint will be the next to fall. That will leave AT&T and VZW with room for one more, possibly a Google type venture. Any thoughts?

13 posted on 02/29/2008 6:53:53 PM PST by IllumiNaughtyByNature (Hillary Clinton - It's OBAMAS Party and She'll Cry if She Wants to?)
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Wish I knew how the double posts get there...
:-(


14 posted on 02/29/2008 6:53:55 PM PST by elpinta (Tagline temporarily out of service)
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To: FoxInSocks
They had to court "poor credit" customers because of their terrible service.
15 posted on 02/29/2008 6:54:29 PM PST by stentorian conservative (Ignore Napolean's Dogs. . . Vote your conscience.)
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To: IllumiNaughtyByNature

You forgot that we still have TMobile. And since that’s owned by the German government, I doubt it’s going away.

AT&T had too many stores in too many places. They needed to close down at least half of them - and they’ve done so. For example, you don’t need three AT&T stores in a 3/4 mile radius.


16 posted on 02/29/2008 6:56:46 PM PST by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: FoxInSocks

I’ll tell you what my store sells sprint phones and their credit requirements are ridiculously lax. I qualify for five lines no spending limit and no deposit and I work part time and go to college.

Then I see customers who need to put down 250 dollars per line. How do you possibly screw your credit up to the point where that happens? It genuinally baffles me.


17 posted on 02/29/2008 6:58:26 PM PST by utherdoul
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To: Spktyr
Tmobile still has some of the metro 18-25 users but they are light years from being a business provider. That is where the gains are made. Getting a family of 4 is a lot different than getting 50-500 line deals with companies. VZW is marketed that that segment and AT&T also. Sprint, Tmobile and the others are going for consumer use and are getting left in the dust of the two mentioned as far as growth.

The side benefit to croporate lines is that families who have a corporate phone usually switch to be "in network" with the parents, etc.

18 posted on 02/29/2008 7:02:41 PM PST by IllumiNaughtyByNature (Hillary Clinton - It's OBAMAS Party and She'll Cry if She Wants to?)
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To: elpinta
In my limited experience of 38 years of Corporate endurance ‘short run’ is usually rewarded far more than long term gains.

Do you mean companies look for short-term gains to the detriment of long-term growth? I have a military background, not a corporate background.

Just askin'. :-)

19 posted on 02/29/2008 7:05:43 PM PST by FoxInSocks (B. Hussein Obama: The Paucity of Hope)
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To: FoxInSocks

Yes, most do, and it shows.
Them quarter profits reign!!!
Glad I am on my way out of that mentality.
Just research how the Japanese took on the automotive and steel industries: long term goals.


20 posted on 02/29/2008 7:11:14 PM PST by elpinta (Tagline temporarily out of service)
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To: Spktyr
And Sprint service continues to suck.

Sprint's service has always been great for me. Especially when traveling.

But recently I've had problems. Namely getting messages 2 or 3 days late etc. That's ridiculous.

21 posted on 02/29/2008 7:15:00 PM PST by Jorge
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To: queenkathy
I also don’t like the fact that anytime I change my plan they extend my contract.

After my contract expired Sprint renewed it without my consent and tacked on $200 fee penalty per line (2 lines = $400) if I try to leave before the new "contract" expires.

22 posted on 02/29/2008 7:17:22 PM PST by disclaimer
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To: Jorge

I’ve heard MetroPCS has people waiting hours for messages and sometimes up to 24 hours but never days. Wow! hope they were not business related messages that cost you/your company profits.


23 posted on 02/29/2008 7:17:28 PM PST by IllumiNaughtyByNature (Hillary Clinton - It's OBAMAS Party and She'll Cry if She Wants to?)
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To: proxy_user
They fired their sales force and then wondered why sales plummeted.

You would be stunned at how many companies do this. Stunned. "Expenses are too high. Fire the sales force." How incredibly stupid.

24 posted on 02/29/2008 7:19:45 PM PST by Hardastarboard (DemocraticUnderground.com is an internet hate site.)
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To: Hardastarboard

There is a great New Yorker cartoon about that: expensively dressed executives in the boardroom with the plunging sales chart.


25 posted on 02/29/2008 7:25:42 PM PST by proxy_user
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To: FoxInSocks

Subprime Phones!??!!??


26 posted on 02/29/2008 7:29:49 PM PST by Reagan80 ("Government is not the solution to our problem, Government IS the problem." -RR; 1980 Inaugural)
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To: saganite

I heard NASCAR has so much trouble keeping CUP promoters, Winston, Nextell, Sprint, they are going to finalize on “the Clinton Cup Series”; It’s impossible to ever get rid of the Clintons.


27 posted on 02/29/2008 7:40:06 PM PST by Uncle George
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To: elpinta

Stop double clicking!


28 posted on 02/29/2008 7:45:16 PM PST by US_MilitaryRules (All my bullets are dipped in PIG fat. How about yours?)
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To: FoxInSocks

This is distressing. When Sprint first came into business one of their initial programs was the Free And Clear $15/mo for 100 minutes. I still have it and it will have to be pried from my cold dead fingers unless Sprint goes under.

Many times over the last 10 years they have tried to woo me off it with new phones coupled with other programs of course. Thanks but no thanks.


29 posted on 02/29/2008 7:47:40 PM PST by Allen In Texas Hill Country
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To: FoxInSocks
Now the company is feeling the pain disproportionately as the economy weakens and consumers default on their debts.

More like crappy service is causing their loss of customers.

30 posted on 02/29/2008 7:52:32 PM PST by skateman (Always vote Republican)
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To: FoxInSocks
$29.45 billion fourth-quarter loss

They must have meant million not billion. Math nor money was ever a communist Washington Post writer strong suit.

31 posted on 02/29/2008 8:04:41 PM PST by Reeses (Leftism is powered by the evil force of envy.)
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To: FoxInSocks

I’ve been a Sprint customer for about the last 10 years. Maybe I’m just easy to please, but I’ve always been happy with my service. Especially when my co-workers with Verizon and AT&T are always complaining about their lousy data signal.

To each his own, I guess.


32 posted on 02/29/2008 8:12:41 PM PST by Doohickey (McCain 2008: A President with Tourette's will make press conferences interesting...)
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To: FoxInSocks

Reality is that there were probably many idiots out there paying their phone bills with their super high interest credit cards. Eventually such a house of cards will fall when the wind blows.


33 posted on 02/29/2008 8:16:04 PM PST by KoRn (CTHULHU '08 - I won't settle for a lesser evil any longer!)
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To: yldstrk
"it is a very poorly managed company"

I can verify that for you. I used to work for them as a contractor. They have a pathetically run operation that has a bureaucracy that is comparable in efficiency and competence to the federal government.

34 posted on 02/29/2008 8:20:26 PM PST by KoRn (CTHULHU '08 - I won't settle for a lesser evil any longer!)
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To: FoxInSocks

Too bad Sprint didn’t go for the iPhone. Cingular was Apple’s LAST choice, bit no one else had the vision.


35 posted on 02/29/2008 8:26:29 PM PST by RachelFaith (Doing NOTHING... about the illegals already here IS Amnesty !!)
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To: RachelFaith

Everyone else wanted to cripple the phone, make every feature extra cost, and charge by the minute.


36 posted on 02/29/2008 8:31:14 PM PST by Spktyr (Overwhelmingly superior firepower and the willingness to use it is the only proven peace solution.)
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To: Reeses

The loss amount was correct, however the full article clarified that most of it was related to the company’s decision to write down much of the remaining value of the Nextel purchase. This was mostly an accounting move by the new management to put past decisions behind and clear the path for their restructuring plan.


37 posted on 02/29/2008 8:36:52 PM PST by etcb
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To: Spktyr
For example, you don’t need three AT&T stores in a 3/4 mile radius.

They can sublet the space to Starbucks.

38 posted on 02/29/2008 8:54:47 PM PST by KarlInOhio (Rattenschadenfreude: joy at a Democrat's pain, especially Hillary's pain caused by Obama.)
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To: Spktyr

They are also dinosaurs who will go away. Sadly, there is a reason ATT has been around for a century. They aren’t stupid.

I has sprint. And their service sucked and so did their phones. And I had a 6700 PPC when it was brand new. Hated it for all the two years I carried it.


39 posted on 02/29/2008 9:00:31 PM PST by RachelFaith (Doing NOTHING... about the illegals already here IS Amnesty !!)
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To: Spktyr
Everyone else wanted to cripple the phone, make every feature extra cost, and charge by the minute.

Especially Verizon. They are the worst nickel-and-dimers in the business. They took what was a pretty cool phone for its time, the v710, and totally crippled all its best features in order to line their pockets with fees from their crappy proprietary ringtones and games etc. It put such a bad taste in my mouth that I was eager to jump to AT&T as soon as they came out with the iPhone. I hate Verizon and will never go back. The company defines penny ise and pound-foolish.

--ccm

40 posted on 02/29/2008 9:08:28 PM PST by ccmay (Too much Law; not enough Order.)
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To: FoxInSocks
Sprint does not allow their picture mail to work with the Treo or other smart phones, yet no one would mention this fact when I got my Treo with the Vision Plus package.
41 posted on 02/29/2008 10:11:34 PM PST by Mark was here (The earth is bipolar.)
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To: RachelFaith
And I had a 6700 PPC when it was brand new. Hated it for all the two years I carried it.

LOL! I have Sprint and a PPC 6700. I love the service and the phone. It's not the service that sucks for me, it's the customer service.

But there is nothing better than to sit in an airport where they want you to pay $10 or $20 for the "day" for WiFi when all I have to do is setup my bluetooth on the laptop, turn it on in the 6700 and use my phone as a wireless modem.

The $100 unlimited calling/data is a fantastic deal. Data alone on the other networks appears to be pretty expensive.

Oh, as of last month you can now make changes to your plan without resetting your contract.

42 posted on 02/29/2008 11:31:30 PM PST by VeniVidiVici (Benedict Arnold was against the Terrorist Surveillance Program)
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To: FoxInSocks

This is great news.

My experience with Sprint: they deluged me with junk mail the whole time i was a customer. Somewhere in all that mail was a change in the terms of service on the calling card they’d issued me. They tripled the rate.

I subsequently found myself in the midst of an emergency and used the calling card— only to be presented with an enormous bill for one month’s service.

Their response: I was a ‘legacy’ customer and had forfeited my right to notification — they could set their rates with impunity.

I paid the bill, and wrote to the CEO telling him to procreate with a barnyard animal. And I predicted the company would fail, I was only wrong about the time frame


43 posted on 03/01/2008 7:54:08 AM PST by IncPen (Elect Barack and it's an Obama-Nation !!)
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To: FoxInSocks

Sprint who? They still around?


44 posted on 03/01/2008 7:59:00 AM PST by CodeToad
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To: FoxInSocks
Sprint is my long-distance server. But over the years, my long-distance bill has diminished to almost bare bones because I began utilizing email to contact out-of-state friends and relatives....including my London cousins.

So it's just not deadbeats that's causing Sprint's downward spiral. It's partially due to folks like me who find it a thousand per cent more economical to write and email than to automatically and lazily (that was me) reach for the phone to contact someone.

Leni

45 posted on 03/01/2008 8:08:15 AM PST by MinuteGal (FRed and Mitt are Still My Guys)
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To: FoxInSocks

I had Nextel for 4 years, and recently wanted to upgrade my phones (family plan) so I called Sprint to see if I could transfer service from Nextel without a penalty on one of the phones that was under the 2 year contract period. Without hesitating, the service rep assured me I could, and for a similar rate I had on Nextel. I, said I would call back after doing some research on which phone I wanted.

I did that the next day and ended up talking with 7 different people trying to cancel out of Nextel and entering Sprint’s domain. I finally asked for a supervisor who handled the process very efficiently.

So far, the quality of service is similar to that of Nextel in my area, and I’m satisfied.

I had another experience working with Sprint Long Lines when I worked on a private network for a major retail chain. Working with AT&T was certainly more structured and defined compared with Sprint, but Sprint’s flexibility made the job a lot easier.


46 posted on 03/01/2008 8:58:53 AM PST by khenrich (Ironically, Gore notes that he has run for president twice and says: "I know what it takes to win.?)
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To: VeniVidiVici

You mean I can now change my contract and not get it extended at Sprint? good news!
Another thing that irritates me with Sprint is that my son has TMobile and he can take that chip out and exchange phones daily if he wants. He buys phones or exchanges them with other people or family members and just puts his SIMS card in.
With Sprint you can’t do that.


47 posted on 03/01/2008 9:04:43 AM PST by queenkathy (I will never give up and I will never give in)
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To: FoxInSocks

Essentially, they got themselves a customer base that uses the service more extensively than most, and pays for it less frequently than most. Generally what they were doing was looking for customers to replace those who’d taken cheaper options. Early on, there were a lot of folks who used their cell only occasionally, yet still paid for a monthly plan. Those folks were gravy, because they represented pretty much pure revenue without a need to expand the system. The various ‘pay as you go’ services have captured a considerable amount of that market.

Tracfone spotted what was going on, and has moved aggressively into serving the low usage customer. I, for example, am currently paying about eight bucks a month for cell service. Makes no sense for somebody who’s on their cell all day, but works just fine for the occasional user.

Nextel also has another issue with the need to either move their frequencies or pay the costs for public safety agencies to move their frequencies to avoid some significant cross-talk problems that they’ve had. That’s a huge expense that isn’t going to be limited to one year.


48 posted on 03/01/2008 9:16:08 AM PST by ArmstedFragg
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To: Spktyr
And Sprint service continues to suck.

Less suck than a few years ago when it took up to 24 hrs to be notified of voice mail messages. Now they've improved it to delivery within 12 hrs.

49 posted on 03/01/2008 9:53:14 AM PST by varon (receptive)
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To: VeniVidiVici

ATT has the real web on the iphone so I dont even need to open up the laptop and it too has $99 unlimited.

I do not miss Sprint but for competitions sake I hope they stick around and get back on their feet.


50 posted on 03/01/2008 10:03:28 AM PST by RachelFaith (Doing NOTHING... about the illegals already here IS Amnesty !!)
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