Sprint Nextel posts 1st subscriber gain in 3 yrs

[July 28, 2010]  NEW YORK (AP) -- Sprint Nextel Corp. said Wednesday that it gained subscribers in its second , for the April-June quarter, the first such gain in three years, as it continued to improve customer service and retention.

However, it continued to lose the most lucrative customers, those who sign two-year contracts, and posted a wider loss due to tax effects.

Sprint shares gained 48 cents, or 9.9 percent, to $5.31 in pre-market trading.

Sprint gained a net 111,000 subscribers in the April to June period, compared to a loss of 257,000 in the same quarter last year. It said it expects to keep adding wireless subscribers for the rest of the year, and reduce the number of contract customers who leave.

Sprint still lost 55,000 subscribers under its own brands in the latest quater, but made up for that by adding 166,000 wholesale and affiliate subscribers, who buy access to the network through resellers.

It lost 228,000 contract subscribers, a figure much improved from the 763,000 it lost in the same quarter last year.

Sprint has been hemorrhaging subscribers nearly constantly since its 2005 acquisition of Nextel. That network, incompatible with Sprint's, is valued for its walkie-talkie-like push-to-talk function, but is poorly suited to smart phones, and millions of subscribers have been leaving every year.

The rate of contract subscribers cancelling service every month was 1.85 percent in the quarter. That was Sprint's lowest figure ever, though it's still higher than the corresponding figure at AT&T and Verizon Wireless.

Sprint ended the quarter with 48.2 million subscribers.

Its quarterly loss amounted to $760 million, or 25 cents per share. That compares with a loss of $384 million, or 13 cents per share, a year earlier.

Analysts who took into account a change in Sprint's tax treatments were on average expecting a loss 24 cents per share, according to the company.

The Overland Park, Kan., wireless carrier's revenue slipped 1 percent to $8.03 billion. Analysts expected $8.0 billion in revenue.

[Associated Press; By PETER SVENSSON]

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