Sprint Nextel Defends Cutting Customers

In a file photo passers-by walk past a Sprint Store in Boston, Wednesday, Dec. 15, 2004 . Sprint Nextel Corp. sent letters to about 1,000 subscribers June 29, saying the company's records showed they had made frequent calls for help with questions about billing and other account information. The customers were told their service agreements were being terminated. (AP Photo/Winslow Townson) (Winslow Townson - Associated Press)

CIBC World Markets analyst Tim Horan said in a research note to investors that he didn't see anything alarming with Sprint's decision.

"Sprint has taken a number of steps to improve the 'quality' of its customer base and we view this measure in the same light," Horan wrote.

Sprint, which has about 54 million subscribers, has been trying to upgrade its customer base, tightening credit requirements and attempting to attract customers who will spend more each month on data services, such as Internet browsing, music downloads and streaming video.

During the most recent quarter, the company said it gained just 600,000 new customers, while AT&T and Verizon gained 1.2 million and 1.7 million, respectively.

Earlier this month, Sprint unveiled a new marketing campaign aimed at highlighting its network speed and capabilities, an attempt to distance itself from earlier marketing campaigns that were criticized as unfocused and confusing.

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On the Net:

Sprint Nextel Corp.: http://www.sprint.com