Sprint reports smaller fourth-quarter loss; subscribers increase
By Sinead Carew
NEW YORK (Reuters) - Sprint Corp (S.N: Quote) reported a smaller fourth-quarter loss than estimated and an unexpected increase in wireless subscribers, sending its shares up 7 percent in early trade.
The company, which is 80 percent owned by Japan's SoftBank Corp (9984.T: Quote), said it added 58,000 net subscribers in the quarter compared with the average expectation for a loss of 83,500 subscribers from six analysts contacted by Reuters. Estimates ranged from a loss of 48,000 to a loss of 400,000.
"We would characterize these results as better than feared," said Wells Fargo analyst Jennifer Fritzsche.
However, the growth was still minuscule in comparison to rivals Verizon Wireless (VZ.N: Quote)(VOD.L: Quote), AT&T Inc (T.N: Quote) and T-Mobile US TMUS.N. Sprint has been losing customers due to a shutdown of one network and a massive overhaul of its remaining network which is degrading the quality of its phone calls.
Sprint executives said the No. 3 U.S. mobile provider would continue to see a high rate of customer defections, known as churn, in the coming months, as it continues the network upgrade and warned of a subscriber loss for the first half of the year.
"During the construction phase, there is a period of disruption to our network service which manifests itself in higher voice service drops and blocked calls," Chief Executive officer Dan Hesse told analysts on a conference call. "Voice performance is very noticeable to customers so heightened blocks and drops contribute significantly to churn."
Chief Financial Officer Joe Euteneur added that the company would report customer net losses for the first half of the year and growth for the second half of 2014.
The problems come at a bad time for Sprint because of heightened competition in the U.S. wireless industry as both T-Mobile US and AT&T have been ramping up promotions aimed at stealing their rivals' customers. Continued...