Sprint’s Lifeline issue hurts wireless service revenue

Sprint reported losing nearly 300,000 phone subscribers in the latest quarter alongside profit losses and revenue declines, and felt a negative impact from its issues with the government’s Lifeline program. In September, the Federal Communications Commission revealed that Sprint had falsely collected “tens of millions” in subsidies for subscribers the carrier incorrectly claimed under the Lifeline program, which is meant to help provide phone and internet service for low-income Americans. Sprint claimed and received subsidies for 885,000 Lifeline subscribers who were inactive and did not meet the program’s usage requirements ­– a figure that, according to the FCC, represents 10% of the entire Lifeline program’s subscriber base and 30% of Sprint’s Lifeline subscribers. Sprint had said once the carrier discovered the error it immediately and proactively raised the issue with the FCC and appropriate state regulators. In earnings materials, Sprint reiterated that it’s “committed to reimbursing federal and state governments for any subsidy payments that were collected incorrectly.” The FCC is investigating the Lifeline issue and aside from reductions in revenue, Sprint still might face fines, which could total in “the low billions of dollars,” according to a research note from analysts at New Street Research.