Sprint Loss Narrows on Subscriber Improvement

By Dow Jones Business News, 
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Sprint Shows Improvement in Subscriber Growth

Sprint Corp. Chief Executive Dan Hesse said mergers that would create a bigger rival to the U.S. wireless market's leaders would be good for competition, even though regulators have made clear they would oppose further deals.

The comments during a conference call with analysts came as people familiar with the matter say the country's third largest wireless carrier is considering whether to move ahead with a bid for smaller rival T-Mobile US Inc. after antitrust authorities expressed their strong skepticism about such a deal during meetings with Sprint officials in recent weeks.

"I said consistently for some time that I believe that further consolidation in the U.S. wireless industry outside of the big two, outside of AT&T and Verizon, would be healthy for the competitive dynamic of the industry, would be better for the country and better for consumers," Mr. Hesse said during the call to discuss the carrier's fourth-quarter results. "I still believe that's very much the case."

Mr. Hesse declined to comment specifically on talks between Sprint and T-Mobile. He and Sprint Chairman Masayoshi Son met recently with officials from the antitrust division of the Department of Justice and with Tom Wheeler, head of the Federal Communications Commission, the nation's top telecommunications regulator. Mr. Son wants greater scale to justify the cost of building out more advanced networks and to pose a bigger competitive threat to Verizon Wireless and AT&T Inc.

It's unclear whether Sprint will decide to proceed with a bid for T-Mobile in spite of regulator opposition. Meanwhile, the company is beginning to see improvements in subscriber losses and cut back the red ink.

For the quarter, Sprint reported a loss of $1.04 billion, compared with a loss of $1.32 billion a year earlier, as higher subscriber counts boosted the cellphone carrier's revenue.

Revenue rose 1.5% to $9.14 billion. Sprint's shares rose 6.1% Tuesday morning to $8.16.

While the company still lost so-called postpaid subscribers, the industry's most lucrative customers, the rate slowed from previous quarters. Sprint lost 69,000 net postpaid subscribers during the last three months of 2013, compared with losses of 535,000 in the third quarter and losses of 243,000 a year earlier. The loss of just 69,000 contract subscribers surprised analysts, some of whom had predicted the losses would exceed 300,000.

Overall, the company added 477,000 subscribers, thanks to growth in low end prepaid customers as well as at companies that resell service on Sprint's network. One caveat is that much of the improvement was due to the addition of 466,000 less lucrative tablet customers.

Write to Ben Fox Rubin at ben.rubin@wsj.com

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This article appears in: News Headlines

Referenced Stocks: S , TMUS

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