HTC Evo 4G, Samsung Epic Helped Sprint Add Wireless Subscribers in 3Q

The HTC Evo 4G and Samsung Epic 4G helped Sprint add 644,000 wireless subscribers during its third fiscal quarter, but the carrier still posted a financial loss.

The best descriptor of Sprint's third-quarter performance, said CEO Dan Hesse, is "momentum."

Sprint announced third-quarter consolidated net operating revenues of nearly $8.2 billion. However, Sprint still posted a net loss of $911 million during the quarter. However, Sprint also added 644,000 wireless subscribers during the quarter-its best total wireless subscriber net additions since 2006.

"The last two quarters have been the best two churn quarters in our history," Hesse said during an Oct. 27 earnings call, adding that Sprint's return rate in the 30 days is actually lower, since it launched its 30-day money-back guarantee than for any previous year on record. Both the Sprint brand and the CDMA platform were also both net positive for the first time on record.

"That is," Hesse clarified, "more customers are switching to Sprint than are switching from Sprint... Port-ins from our competitors have practically doubled year-over-year. Based upon Sprint's data, they're up 95 percent."

Nonetheless, the carrier still has much ground to cover, in working to catch up to competitors Verizon Wireless and AT&T, which days earlier reported customer additions for the quarter of 1 million and 2.6 million subscribers, respectively. AT&T, which began offering the iPhone 4, additionally posted a quarter packed with records-for gross adds, sales of integrated devices, customer upgrades and third-quarter net adds.

Still, Hesse was positive, ticking off Sprint's own recent accolades, which included its highest rating ever for network satisfaction, according to a third-party survey; top grades in a recent J.D. Power & Associates wireless call quality performance study; and being ranked No. 6 nationally among the 100 greenest companies-the only telecom in the top 95-by Newsweek.

Thanks largely to Sprint's preowned device program, which tidies up used phones for reuse, Sprint placed first for actual environmental impact. It was also named one of the 20 most responsible companies, out of the 4,100 companies evaluated, said Hesse.

Back to wireless matters, Sprint-which is a majority-share owner of 4G provider Clearwire-launched 19 additional 4G markets during the quarter, and has New York, Los Angeles and San Francisco in its sights for the fourth quarter.

Clearwire, however, is in need of $2 billion, according to analyst estimates, to continue the fourth-quarter build out of its network, and so is expected to begin auctioning off portions of its spectrum holdings. Adding that he wouldn't say any more on the matter-though analysts on the call certainly worked to achieve otherwise-Hesse said that "Sprint has been in talks with Clearwire, regarding the financial status of its ongoing operations, as well as Sprint potentially adding new financing." While the discussions are ongoing, Hesse said there are no assurances that they'll result in any transaction.

Through Clearwire, Sprint-something of a "little engine that could" in the wireless industry, after years ago earning a deserved reputation for terrible service-has been the first to offer 4G connectivity. A good portion of its recent success has come thanks to its highly praised 4G-capable smartphones, the HTC Evo 4G, launched during the second quarter, and the Samsung Epic 4G, launched during the third. Following high demand for these handsets, Hesse reported, Sprint posted a postpaid churn result of 1.93 percent-its best ever for a third quarter.

"Although our momentum continues ... we realize that we have much progress still to make," said Hesse. "We are in a hyper-competitive industry, with strong, capable competitors, so making progress is hard work. But we intend to persevere."