Phone Service Feature

Sprint Nextel (News - Alert) shares rose steadily this morning after the company posted a quarterly net gain of mobile subscribers for the first time since early 2007.

The carrier added a net of 58,000 subscribers in the fourth quarter, which beat most analysts' estimates. Sprint's better-than-expected end of 2010 was powered mostly by the company's highly publicized 4G network, its new line of handsets and its popular prepaid mobile plans, which accounted for 646,000 new mobile subscribers in the fourth quarter alone.

Sprint is “seeing increasing demand because of improved network perception and competitive devices,” Jonathan Atkin, an analyst at RBC Capital Markets, told Reuters (News - Alert).

Still, the nation's third largest mobile carrier posted a loss of $929 million, or 31 cents per share, in the final three months of 2010. However, the company narrowed its loss from the fourth quarter of 2009, when it hemorrhaged $980 million, or 34 cents per share.

Sprint's revenue increased by 6 percent to $8.3 billion, up from only $7.87 billion a year ago. The carrier easily beat the Wall Street estimate of $8.16 billion. Furthermore, the company's churn rate dropped significantly for both its prepaid and postpaid plans compared to 2009.

Chief Executive Dan Hesse (News - Alert) applauded the carrier's efforts, but noted that Sprint has a long way to go before its business can compete on the same level of AT&T and Verizon (News - Alert), which reported 400,000 and 872,000 new contract subscribers in the fourth quarter of 2010.

"I'm not declaring mission accomplished yet, far from it," Hesse told a group of investors on a recent conference call.

Sprint speculated that it would post a net gain of contract subscribers for all of 2011, which may be difficult with the anticipated launch of competing 4G networks by rival carriers. Today's rollout of the Verizon iPhone 4 will also make things harder on Sprint in the coming months.

Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf