Sprint Holds off T-Mobile US Offensive

It's probably only a matter of time before T-Mobile overtakes Sprint to become the third-biggest US mobile operator, but it is not yet a "done deal" -- as T-Mobile CEO John Legere put it earlier this week -- after Sprint turned in its best performance in three years in the final quarter of 2014.

A day after T-Mobile US Inc. offered the market a sneak preview of its results for the October-to-December quarter, Sprint Corp. (NYSE: S) followed suit to prove that its recent marketing efforts have not been in vain. (See T-Mobile Beats Customer Growth Targets.)

Thirty thousand postpaid net additions in the recent quarter might not sound all that impressive, given that T-Mobile signed up 1.3 million postpaid customers over the same period. But it's quite a turnaround considering that Sprint lost 336,000 postpaid customers between July and September.

The operator also reported success on the prepaid front, adding 410,000 customers (on its Sprint platform) between October and December after losing 20,000 in the preceding quarter.

"Sprint's first priority is a return to customer growth and our results during the last quarter show we are on the right track," said Marcelo Claure, Sprint's CEO, in a company statement. "While we still have work to do, it is clear that our aggressive actions to provide customers with the best value in wireless are gaining momentum."

Sprint has been responding to T-Mobile's aggressive campaign to build market share, simplifying its pricing plans and slashing tariffs for customers abandoning AT&T Inc. (NYSE: T) or Verizon Communications Inc. (NYSE: VZ) to join its network.

That counter-attack may have taken its toll on earnings, however, with analysts becoming increasingly concerned about the impact of a price war on industry profitability.

Both Sprint and T-Mobile have yet to say anything about sales and profits in the fourth quarter, while bigger rivals AT&T and Verizon have yet to provide any insight into their recent performance.

Moreover, Sprint still seems to be losing "phone" customers on postpaid deals, enjoying growth because of interest in tablet-based mobile broadband offers.

In its statement, the operator said it had "exited the quarter strong on the heels of [its] offers, nearly reaching postpaid phone net additions in December."

Nevertheless, the preliminary results show that Sprint is not prepared to relinquish its number-three spot in the mobile market without a fight.

Earlier this week, it revealed it had raised as much as $1.8 billion in vendor funding for the rollout of its Spark-branded 4G LTE service, and that should help it to maintain its new-found momentum on subscriber growth in the next few months. (See Sprint Signs $1.8B in Vendor Financing Deals .)

Legere's mission just got a little bit harder.

— Iain Morris, News Editor, Light Reading