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Summary:

For those who thought that Verizon getting the iPhone would be too much of a blow to Sprint’s numbers this quarter, the number-three mobile…

Sprint Nextel's Sprint Ahead
photo: Sprint

For those who thought that Verizon getting the iPhone would be too much of a blow to Sprint’s numbers this quarter, the number-three mobile operator has a simple message for you: it wasn’t.

The company netted 1.1 million new subscribers in Q1 2011, its best number in five years. This bring’s Sprint’s total subscriber base to 51 million customers.

Sprint’s total revenues for the quarter were $8.3 billion. This beat analysts’ revenue estimates of $8.19 billion, according to Dow Jones.

Sprint (NYSE: S) also nearly halved its net loss — $439 million, compared to $865 million for the same quarter one year ago.

But it is evident that Sprint’s wireless subscriber gain is coming at a competitive cost. Its $8.3 billion in revenues represented only a three percent increase on revenues a year ago. Moreover, only 310,000 of Sprint’s new subscribers are on contracts. The rest are prepay users, who tend to generate significantly less revenue than those who take contracts and pay hefty monthly fees.

To date, Sprint has launched 22 4G devices that run on its 4G WiMax network but it is facing stiff competition there from Verizon, which now has its LTE network up and running. Sprint is also currently fighting tooth and nail against the proposed merger of AT&T (NYSE: T) and T-Mobile USA, which will make it into a more-distant third-place operator in the U.S.

The company did not break out in its initial earnings statement how 4G performed compared to other wireless products, or how much data usage it is getting on its network. We’ll listen into the earnings call and will update with more information as we get it.

Update: On the earnings call, CEO Dan Hesse spelled out, once again, Sprint’s opposition to the merger of AT&T and T-Mobile. Given the regulatory scrutiny currently underway at the FCC, and the large number of investors more interested in higher revenues, he aimed all of his remarks at addressing the financial benefits of competition:

“I think there is little doubt that Sprint rolling out the first 4G network greatly influenced Verizon and AT&T [to roll out LTE],” he said. “If Sprint had not been a legitimate mobile threat the U.S. would be a wireless also-ran.”

He also cited the launch of different data plans, innovation among developers and a bigger market for suppliers are all also benefits of having more than just two strong operators in the U.S. “All boats will float higher in a vibrant and innovative industry,” he said.

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  1. What iceberg?

    Joe

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