NEW YORK (AP) — The iPhone helped Sprint gain customers in the latest quarter, but also forced the carrier to post its largest loss in three years because of the high cost of the phone and a network upgrade.
Sprint Nextel Corp., the No. 3 U.S. wireless carrier, on Wednesday posted a loss of $1.3 billion, or 43 cents per share, in the October to December period. That compares with a loss of $301 million, or 10 cents per share, a year earlier.
Excluding one-time charges, the loss was 35 cents per share. Analysts polled by FactSet were on average expecting a loss of 38 cents per share, excluding items.
Revenue rose 5 percent to $8.7 billion, matching the analyst estimate.
Sprint shares rose 11 cents, or 4.5 percent, to $2.56 in premarket trading
The Overland Park, Kan., company started selling the iPhone in October, hoping it would help it keep and attract customers. But Sprint needs to subsidize each phone by hundreds of dollars to sell it for $99 or $199, placing an additional burden on a company that's already strapped financially.
Sprint activated 1.8 million iPhones in the quarter, compared to 7.6 million at AT&T Inc. and 4.3 million at Verizon Wireless. Sprint said 40 percent of the iPhone users were new to the company, while AT&T usually reports a figure around 25 percent.
The phone helped Sprint post a rare increase in the number of subscribers on contract-based plans, which cost more than contract-free alternatives. It gained 161,000 such subscribers in the quarter.
In the last four years, Sprint has only posted one other net increase in contract subscribers. While the "Sprint" brand has been doing relatively well, it's been hemorrhaging subscribers from the aging "Nextel" network. It's now in the process of shutting that network down and repurposing the spectrum for a new "4G" data network. The cost of that upgrade also weighed on its results.