Despite the increasing competition from T-Mobile(s tmus) for smartphone and prepaid customers, Sprint(s s) managed to attract 477,000 customers to its network in the fourth quarter of 2013. It also continued the slow expansion of its 4G networks, announcing its Spark system is now live in Philadelphia and Baltimore. But the carrier’s expensive network upgrade is also taking a toll on its financials, with write-downs on the now defunct Nextel resulting in a $1.04 billion loss.
Though Sprint’s subscriber base grew in Q4, it’s probably not the type of growth it was hoping for. Almost all of that growth came from 327,000 wholesale customer additions from the extensive network of mobile virtual network operators (MVNOs) on its network. Sprint resellers like FreedomPop and Ting both said they had big fourth quarters, driving new connections onto Sprint’s network. While each of those wholesale subscriptions is an easy source of revenue for Sprint, they’re not very big ones, bringing in a fraction of what a contract customer pays each month.
The rest of Sprint’s subscriber growth was driven by prepaid plans as it lost contract subscribers, many of whom were final stragglers still on Nextel plans. But at least Sprint is growing again. The sunsetting of Nextel’s iDEN network last summer played havoc with Sprint’s customer base all last year, so Q4 could mean the worst is behind it.
Of the four nationwide carriers, Sprint saw the smallest boost in net new connections in Q4. Verizon led the way with 1.7 million net additions, while a newly revitalized T-Mobile was hot on its heels with 1.6 million net additions. AT&T’s growth slowed, but it still managed 800,000 new subscribers.
Sprint also revealed in its earnings call that its primary LTE network now reaches 200 million people, though it still has some big gaps in its footprint in major cities, including San Francisco, Seattle, Denver and Washington, D.C. It’s newest LTE system Spark, which is designed to augment its main 4G coverage network with more capacity, is now in 14 major metro markets. But it will roll out slowly, reaching 100 cities in three years.