Sprint (NYSE:S) Oct. 26 said it added more than 1.3
million new wireless subscribers in the third quarter despite posting a net
loss of $301 million, or 10 cents a share, on sales of $8.33 billion.
Financial analysts was expecting a loss of 22 cents a share on revenue of $8.38 billion.
Sprint, which also reported a $208 million boost in
operating income, compared to a $213 million operating loss from a year ago, posted
its best subscriber numbers in over 5 years.
The No. 3 U.S. carrier saw 304,000 postpaid users, 485,000
prepaid customers, along with 835,000 wholesale and affiliate subscribers. The
subscriber gains came without the benefit of the iPhone 4S, which Sprint launched
Oct. 14 and quickly topped the storied launch of Sprint's Android-based HTC Evo
4G smartphones from 2010.
There's no question the phone, which yielded Sprint's
best-ever day of device sales in retail, Web and telesales, will buoy the
company at a time when AT&T (NYSE:T) and Verizon Wireless have double the
subscribers of Sprint, which ended Q3 with more than 53 million customers.
Indeed, Sprint CEO Dan Hesse showed a chart depicting
postpaid additions as falling steadily from late 2005 until Q2 2009. "The
brand had weakened enough that gross add dropped for 13 of 14 quarters,"
Hesse, adding that Sprint lost over 2 million postpaid gross additions per quarter.
Hesse left little doubt the availability of the iPhone 4S
will bolster the company's turnaround going forward.
"The No. 1 reason users leave Sprint, or churn, is
no iPhone, and we believe the No. 1 reason new customers don't try Sprint has
been no iPhone," Hesse said on the earnings call this morning.
"Our early results of selling the iPhone 4 and iPhone 4S have confirmed
the iPhone's ability to attract new customers. What one hopes to see from the
device is a high percentage of gross adds, new customers and new revenue to
Sprint."
Sprint certainly needs this, as it will cost the company $15.5
billion over the course of its four-year contract with Apple to sell
the iPhone.
While he said two weeks in the market is
not enough time to estimate gross add percentages, Hesse vowed to provide
investors with a more cogent sales estimate after the fourth-quarter results
are in. Over time, Hesse believes iPhone users are
expected to be among Sprint's most-profitable customers.
Hesse also acknowledged a potential deal with Clearwire to help
build out the company's LTE (Long Term Evolution) network. He added
that the companies want to "begin negotiations of commercial terms
under which Sprint may utilize and pay for access to the Clearwire LTE
network."
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