Sprint Nextel saw its second quarter profits fall 95% over the second quarter of 2006, but Sprint Nextel Chairman and CEO Gary Forsee emphasized the company’s position for growth in addressing industry analysts.

Those growth areas include the rollout of WiMAX in the second half of the year, growth in wireless data and wireline IP offerings, expansion of the company’s joint venture with four cable players to include wireless in service bundles, and the launch of new offerings including Q-Chat, the push-to-talk feature for Sprint’s CDMA customers, and this year’s rollout of PowerSource phones that can use both the Sprint CDMA and the Nextel iDEN network.

Forsee also focused on the company’s move to a common billing and customer care platform, already in place for former Nextel iDEN users and now being deployed for Sprint CDMA customers.

On the cable joint-venture front, he admitted disappointment in how long it took the companies to get the back-office operations right. “There is a ramping up that invariably occurs, so they can get call centers and point of sale ready, and for people getting used to the systems that have been integrate across the country,” Forsee said. “The disappointment is that it took us longer because we spent time on the back office to get that right before we went to market, and at this stage, there is still some system work to be done to speed up that activation.”

The partners have now launched in 20 markets and expect to be in 40 markets by year’s end, Forsee said. Both Sprint and the cable companies “are committed to make this work,” he added. Sprint is willing to be flexible and tailor the wireless offer to specific market needs, he added.

The company continued to struggle in adding new customers at the same pace as its competitors, AT&T and Verizon Wireless. Sprint added 16,000 post-paid in the second quarter, an improvement over its loss of 220,000 customers in the first quarter, and added 373,000 wireless customers overall, for a total of 54 million customers. The company reported earnings of $19 million or one cent per share, compared to $370 million or 10 cents per share in the second quarter of 2006. It attributed those results to start-up costs associated with its WiMAX initiative, weaker operating income and continued costs from the Sprint-Nextel merger.

Sprint made major progress on the WiMAX front in the quarter, announcing both its intent to partner with Clearwire to create a national WiMAX network and also a deal with Google to create a new mobile Internet service. Forsee said the Sprint-Clearwire negotiations are on track.

“We set out a 60-day time frame to negotiate the core operating agreement and we are spending a lot of time with Clearwire to get that completed,” he said. “We had spent a lot of time on what would have been the difficult terms and conditions, so now we just have to do the heavy legal lifting” to prepare documents for approval by federal agencies.

Sprint is looking to not only tie its WiMAX offering together with that of Clearwire to create a national network at much lower cost but also to share its existing network infrastructure and resources, Foresee said.

Other highlights of the Sprint earnings report:

• The new “Sprint Ahead” marketing campaign seems to be working, based on early indications that include increased Web traffic, Forsee said. The company did see some impact of the iPhone launch, but that moderated.
• Sprint brought nearly 2400 new cell sites on line in the first half of the year, with about three-quarters of these supporting CDMA, he said. Its EVDO-Rev A coverage surpassed 200 million PoPs, “which means that over the last 12 months our network team has increased pop coverage by more than 50% and extended our overall footprint by quarter of a million square miles.”
• The PowerSource phones, launched by Sprint and Motorola in January, have attracted 850,000 users, most conversions from iDEN.
• Sprint completed consolidation to a single general ledger in July and the conversion of all wireless subscribers to a single billing and customer care platform. Forsee said. “All IDEN and PowerSource customers are on this platform and we have converted approximately 30% of our CDMA customer base,” he said. The ramp continues this year, and will be completed in mid-2008. Its benefits include “lower cost per bill, general productivity improvements and efficiencies for billing agents and customer care reps,” Forsee said. Elevated spending to implement the new plan eases up in ’08.
• Wireless data revenues were up 40% to $4.8 billion on an annualized basis, Foresee said. Sprint has data ARPU for its CDMA service of $12.75 per month, which he said leads the industry.
• Strong demand for broadband wireless continues, with Sprint hitting the one million mark in sales of wireless cards for laptops.