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Sprint Freezes Pivot Phone Rollout With Cable Operators

Sprint Nextel acting CEO Paul Saleh on Thursday said the company will halt the rollout of the Pivot mobile-phone service offered through a venture with four cable operators, saying the product remains “very complex to provision.”

“As our focus is on simplifying the business and particularly focusing on the customer experience, we have made a decision not to expand that service in other markets or other stores,” Saleh told Wall Street analysts during the company’s third-quarter earnings call.

Pivot is currently available in 33 markets and in about 20% of Sprint's stores, according to Saleh. Sprint had expected to launch Pivot in 40 markets by the end of 2007.

Saleh, Sprint’s chief financial officer, was named acting CEO on Oct. 8, after chairman and CEO Gary Forsee was forced out by Sprint’s board. Forsee had led the deal to form the Pivot JV with Comcast, Cox Communications, Time Warner Cable and Bright House Networks, announced in November 2005.

According to Saleh, “the unfortunate part is that this product [Pivot] is still very complex to provision” making it “very difficult to deliver in a timely and a simple process to the point of sales. So, as a result of that ... we’ve just stopped the additional expansion of that product in our stores.”

However, Saleh noted, “We are still very strategically aligned with the cable companies. We are working very hard with them on simplifying that offering to the marketplace.”

This summer, Forsee alluded to factors that had slowed down the commercial deployment of Pivot, describing systems-integration work that was needed to speed up customer activations.

Meanwhile, Sprint’s business of selling access to cable operators for voice-over-Internet-Protocol connections has been swelling. At the end of September, the company was providing telephony services to 2.6 million cable VoIP customers -- twice as many as the third quarter of 2006. Sprint’s cable VoIP customers include Time Warner Cable.

Over all, Sprint reported $10.0 billion in revenues for the third quarter compared with $10.5 billion in the year-ago quarter. Net income was $64 million, versus $279 million in the third quarter 2006. The company reported a net decline of 60,000 total wireless subscribers in the third quarter, losses that Sprint said were partially offset by growth in wireline revenues.