Sprint Corp. is finding its footing in the wireless industry’s tug of war over subscribers and is plotting another network boost to strengthen its stand.
The Overland Park-based company held on as the nation’s third-largest wireless carrier by adding 1.2 million subscribers in the first three months of this year. It foiled for at least another three months the plans at fast-growing rival T-Mobile to pass it.
Subscribers totaled 57.141 million at Sprint at the end of March, compared with 56.836 million at T-Mobile.
Sprint fared better in large part by holding tighter to the customers it already had, posting its lowest customer loss rate, or churn, since June 2012.
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“Churn to me is the voice of the customer,” Sprint chief executive Marcelo Claure said in an interview. “That’s a huge vote of confidence from our customer base.”
At the same time, Sprint said Tuesday that its net losses deepened, its revenues shrank, and its network needs more investment in what the company is calling the Sprint Next Generation Network.
Financial losses for the quarter grew to $224 million in January, February and March, up from a $151 million loss a year earlier. March also ended Sprint’s fiscal year, in which it lost $3.3 billion, up from $2.5 billion in its previous fiscal year.
The subscriber fight among the big four wireless companies has focused on grabbing each others’ customers because most consumers already have cellphones. Sprint has been losing its most valuable wireless customers to the other companies steadily for years.
Claure said the tide began to shift in Sprint’s favor in the first three months of this year. For the first time in nearly three years, Sprint pulled more high-value wireless phone customers away from Verizon, AT&T and T-Mobile than they took from Sprint.
Carriers can track where they’re gaining ground because customers who switch carriers take their phone numbers with them.
“It’s a big improvement,” Claure said of Sprint’s recent results. “We significantly changed the trajectory of the porting business.”
Specifically, nearly 10,000 more wireless phone customers switched to Sprint from the other three big carriers than walked the other way in the first three months of this year. Sprint had lost 551,000 customers in the porting battles a year ago.
Claure declined to say how Sprint fared directly with each of the other carriers, but he challenged an earlier report from T-Mobile. T-Mobile had said that it gained 2.2 Sprint customers in the first quarter for every customer it lost to Sprint.
“We have no idea how they get to the numbers they quote,” Claure said during a conference call with Wall Street analysts. “They’re completely, vastly different from what we’re seeing.”
A T-Mobile spokeswoman said the company stood by its numbers.
Wall Street analyst Craig Moffett noted Sprint’s subscriber success in the quarter on the heels of its Cut Your Bill In Half promotion aimed at customers of Verizon and AT&T who switch to Sprint.
“These improvements are not to be dismissed,” Moffett wrote in a note to clients of Moffett Nathanson Research. “They are making long overdue changes to the competitiveness of their offer, and it is having its intended effect.”
Moffett, however, said the financial impact of the battle for customers grabbed his attention.
Sprint’s “underlying financial performance was terrifyingly weak,” his note said.
Claure offered some information about plans for the Sprint Next Generation Network. The idea is to add more cellular towers and smaller cell sites in what he called a “massive densification” of the network.
Sprint owns vast amounts of unused wireless spectrum, the licensed airwaves that carry wireless signals for phones, tablets and other mobile devices. This spectrum can carry a lot of wireless signals but only for relatively short distances before it needs to be repeated at another tower.
Claure offered no estimates of when the effort would begin or what it would cost. But he said Sprint’s parent company, Tokyo-based SoftBank Corp., and its chief executive Masayoshi Son back the plan.
Son and SoftBank “are 100 percent behind the concept of densifying the network,” Claure said.
Another big network project would further strain Sprint’s already weak financial situation.
The company wants to take part next year in a government auction of stronger wireless spectrum that carries signals long distances between towers.
Sprint’s recent quarterly loss of $224 million equaled 6 cents a share and capped its results for the company’s fiscal year, which ran from April 2014 through March 2015. Sprint changed its fiscal year to end March 31 after it was acquired by SoftBank, which also has a March 31 fiscal year end.
Sprint’s bigger recent annual loss included a $1.9 billion charge against earnings to reflect diminished value of the Sprint trade name or brand. Sprint said it recorded the charge in light of losing about 2 million of the company’s most valuable customers during the year.
Revenues in the recent fiscal year totaled $34.5 billion, or nearly 3 percent lower than for a year earlier. The decline included a 6.7 percent drop in revenues during the most recent quarter to $8.28 billion. Sprint said the recent decline reflected in part customers’ shift to installment plans to buy phones.