Sprint Posts $643M Loss Amidst Best-Ever Service Revenue, Major Changes

Sprint finished Q1 with its highest-ever wireless service revenues and prepaid subscribers, while shutting down Nextel and negotiating a merger.

Sprint is having a very busy 2013.

It's in the process of shutting down its Nextel network at the end of the second quarter and hustling to funnel over those departing customers to the Sprint network. It's also building out a Long Term Evolution (LTE) network that's well behind the efforts of Verizon Wireless and AT&T; trying to buy out 4G provider Clearwire, after realizing that owning half of the company wasn't quite enough to steer it as it would have liked; closing a deal with Japanese carrier Softbank that entails handing over a 70 percent share of Sprint; and, most recently, considering an offer from satellite TV provider Dish Network that would require backpedaling out of the Softbank deal.

Then there's the not-simple priority of trying to compete in a wireless market that's growing increasingly saturated.

On April 24, Sprint shared the results of its fiscal 2013 first quarter, which reflected much of the above.

It posted a net loss of $643 million—an improvement over a loss of $863 million a year ago. But its wireless service revenues of $7.1 billion were its highest ever, increasing by nearly 7 percent year over year.

Sprint also sold nearly 5 million smartphones, 1.5 million of which were iPhones, and 86 percent of its postpaid handset sales were smartphones.

It posted its highest-ever prepaid subscriber total—16 million—and, at 53.9 million, said the Sprint platform subscriber based was at an all-time high.

It also "recaptured" 46 percent of departing Nextel customers, while warning that that figure is likely to drop to between 30 percent and 40 percent during the second quarter, as it braces for the departure of the final 1.3 million customers still on the Nextel network.

"They tend to be larger business accounts—they tend to be Sprint-branded or CDMA accounts. It could be a hit we'll take this quarter," said Sprint CEO Dan Hesse.

The loss of Nextel customers, and "pressures" of the behind-schedule LTE network buildout, will likely offset seasonal benefits, executives said, though they were positive about the fact that, even with customers leaving, revenue is rising.

The HTC One and Samsung Galaxy S 4 are coming, and—here Hesse paused to adjust his phrasing to something Apple-pleasing—"there could be an iPhone refresh sometime later this year," all of which, he said, are likely to drive upgrades.