Sprint Nextel Corp is keeping an eye on the U.S. economy as stock markets take a rollercoaster ride and credit tightens, but its chief executive said on Thursday telecommunications companies have some insulation against a downturn.
Any time the market loses ... any company is going to watch what it means for our business, Gary Forsee said in an interview with Reuters at the No. 3 U.S. wireless service provider's technology conference here.
He made the comments on a day when stock markets fell as investors ran for cover, spooked by a slump in U.S. home prices that spread through the financial sector as default rates on risky subprime mortgages rose.
The three major U.S. stock indexes -- the Dow Jones industrial average, the Standard & Poor's 500 index and the Nasdaq Composite Index -- fell as much as 10 percent below their mid-July record highs on Thursday.
But Forsee said Sprint is in a good position because its revenue is roughly evenly split between business and consumer subscribers.
We're fortunate we're balanced across business and consumer, Forsee said.
And because telecommunications services have become so crucial to consumers this likely means that the entire telecom sector should have some insulation against economic hardships.
Because it is a requirement for users ... there will be other things they stop spending on before they stop spending on telecom, the executive said.
He was speaking on the sidelines of a conference where Sprint showcased a new high-speed wireless service it is building and outlined its budget for that service.