Sprint says Katrina could cost as much as $200 million

Dow Jones Newswires ^ | Wed, Sep. 14, 2005 | ROGER CHENG

[WestTexasWend]

RESTON, Va. - Sprint Nextel Corp. Wednesday said Hurricane Katrina would cost the company $150 million to $200 million.

The estimate includes the cost of restoring its network, as well as billing relief to customers in the affected regions, Sprint said.

Company spokesman John Taylor said Sprint doesn't have a specific figure for how much it will recoup through insurance.

The financial impact is expected to be spread over the rest of the year, the company said.

Sprint said it has restored service to 90 percent of the storm-hit areas in Mississippi and 70 percent in Louisiana. No specific numbers have been broken out for New Orleans, but service levels continue to be much lower in the area.

Due to a lost long-distance switch in New Orleans, and complications in restoring service to local phone company BellSouth, residential long-distance customers in Louisiana and parts of Florida still have disruptions to their service.

Sprint shares fell 3 cents to $25.24 in morning trading on the New York Stock Exchange.

BellSouth Corp., the major local phone company in the affected region, last week said it expected restoration costs of $400 million to $600 million.

BellSouth estimates that 636,000 phone lines are down in the region. Of that total, 470,000 lines in New Orleans are down, with the rest in Northern Louisiana and along the Gulf Coast.

Mobile carrier Cingular Wireless, jointly owned by BellSouth and SBC Communications Inc., reported that service has been restored in 95 percent of the affected area.

[Andy from Beaverton]

I have a friend who works for MCI who went there to do repairs. Part of the huge problem he said was the absolute poor maintenance. For example, a 1,000 gallon storage tank to fuel MCI's backup generators had a couple inches of sludge in the bottom. Everyday, they had to turn everything off and clean out the fuel lines. I could go on quite a while about how poorly maintained all the equipment was.

[TommyDale]

I could save them a ton of money on cleaning their fiber optic connectors, but getting through to the right people is impossible.

[Publius6961]

Part of the huge problem he said was the absolute poor maintenance.

New Orleans sounds literally like a third world country.
I remember some years ago when the U.S. gave Egypt 200 school buses for their obvious purpose.

Within 18 months all of them were parked due to neglect and lack of maintenance.