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Sprint Posts Wider Loss, Cedes Ground in Battle for Smartphone Customers

The company lost more than 200,000 postpaid phone customers, but gained more than 1.2 million customers overall, thanks to its prepaid business.

Sprint

Sprint continued to lose core postpaid phone customers and money for the first three months of 2015, though it lost fewer such customers than a year ago.

The company said it lost 201,000 postpaid phone customers, down from 205,000 in the prior quarter and 693,000 in the prior year quarter.

Sprint

Postpaid phone customers, or those with better credit and who pay their bill at the end of the month rather than in advance, are the more lucrative part of the wireless business and it is the change in those customers that are the most closely watched metric in the industry.

On the financial side, Sprint lost $224 million, or six cents per share, on revenue of $8.3 billion. That compares to a loss of $151 million, or four cents per share, on revenue of $8.9 billion in the same quarter a year ago. Analysts had been expecting a per-share loss of four cents, according to Zacks.

Sprint did gain overall customers thanks to improvements on the prepaid side of things, adding 1.2 million customers in total, compared to 967,000 customers gained in the prior quarter and net losses of 383,000 customers in the prior year quarter.

That kept Sprint just ahead of T-Mobile in total customers, with 57.1 million as compared to 56.8 million for T-Mobile. T-Mobile has been chasing Sprint to take over as the No. 3 carrier and had already declared last week that it believed it had gobbled up all of the growth in the market as far as core smartphone subscribers.

Shares of Sprint traded down slightly in pre-market trading, changing hands recently at $5.08, down seven cents or just over 1 percent on the New York Stock Exchange.

Update, 5:42 am PT: In a conference call, CEO Marcelo Claure touted progress the company was making in its turnaround effort, including a reduction in the loss of existing customers — a metric known as churn — as well as the overall gain in customers.

“We continue to focus on both quantity and quality,” he said, adding that he was not pleased to see the company lose postpaid phone customers and promised that it would post a gain in the current year, which runs through June 2016.

6:11 am PT: Claure later clarified that he believes it can reach postpaid handset growth sometime in the next couple quarters and then be sustainably positive after that.

“I feel we have very good momentum as it relates to customer acquisition,” Claure said.

6:17 am PT: Claure declined to say how many customers might be gained through its deal to jointly operate 1,400 RadioShack stores. However, he said the RadioShack deal was the lowest-cost way to add much-needed retail presence. “We felt this was the easiest way to gain mass distribution,” Claure said, noting that Sprint only had 1,000 company-owned retail stores prior to the RadioShack deal.

The company doesn’t expect to gain as many customers from the RadioShack stores as from a traditional company-owned store, Claure said, but added the costs are much lower. Sprint pays only a portion of the rent and utilities for the RadioShack stores, as well as providing an average of one or two full-time workers per store.

This article originally appeared on Recode.net.

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