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Sprint Perks Up in Competitive Q1

Sprint Corp. (NYSE: S) showed improvements in the first quarter, even as competition in the industry intensified -- evidence CEO Dan Hesse used to support his claim that a wireless duopoly would ruin all its hard work. (See Sprint Reports Q1.)

The first quarter saw Verizon Wireless get the iPhone 4, and AT&T Inc. (NYSE: T) respond by cutting data plan prices. Even though Sprint also tacked on a $10 premium charge to its smartphones around this time, Hesse said its customer service and 4G leadership helped it stay afloat. (See Verizon Finally Gets the iPhone 4 , AT&T SVP: We're A-OK Post Verizon iPhone and Sprint Raises 3G Prices to 4G Levels.)

"Verizon announced its iPhone and AT&T responded with price as even a duopoly provides more competition than a device monopoly," Hesse jibed.

This was his segue into noting that none of this would happen in a market controlled by AT&T and Verizon. He told investors that he knows a few of them would like to see wireless prices rise, but the industry benefits of the merger would more than offset by health risks like the decline in innovation. (See Sprint: AT&T's Misleading on Merger Talk, AT&T & Sprint's War of Words Gets Louder and Sprint Plans to Fight the AT&T/T-Mobile Deal.)

As another example of the power of competition, Hesse noted that Sprint's rollout of WiMax, the industry's first 4G network, put the pressure on Verizon to speed up its Long Term Evolution (LTE) network deployment, which in turn has pressured AT&T to do the same.

As a result of this competition, the U.S. has regained its global wireless leadership in 4G, which it lost to Europe over 2G networks. If AT&T scoops up T-Mobile US Inc. , it would harm the "unbridled potential of wireless," Hesse said.

With regards to its own 4G spectrum plans, Hesse and CTO Joe Euteneuer reiterated that Sprint's Network Vision strategy allows it to flexibly use the spectrum it currently owns as well as host others' spectrum on its cell sites, but that it will lay out a comprehensive spectrum plan by the middle of the year.

Sprint recently pumped more money into WiMax partner Clearwire LLC (Nasdaq: CLWR) and is expected to be closing a deal with LightSquared for LTE soon. (See Sprint Gives Clearwire $1B Boost and Sprint/LightSquared Deal Expected Soon.)

The numbers
Overall, Sprint added 1.1 million new mobile subscribers, including 732,000 retail subscribers and 389,000 wholesale and other connections. The carrier lost 114,000 valuable post-paid contract subscribers, but 80 percent less than it lost time this last year. At the same time, it gained 846,000 net pre-paid subscribers, including 1.4 million pre-paid CDMA customers and less 560,000 pre-paid iDEN customers.

The addition of new WiMax devices onto the Sprint network , including the High Tech Computer Corp. (HTC) (Taiwan: 2498) Evo Shift 4G and a new mobile hot spot, is helping its revenues creep back up. Data revenues for the quarter were US$8.3 billion, up 3 percent year on year. Wireless service revenue also grew 3 percent to $6.6 billion. Total net loss for the quarter was $439 million, much improved from a loss of $865 million a year ago.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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