Sprint posts another loss as T-Mobile merger remains in limbo
The carrier continues to struggle as the pending T-Mobile merger hangs over the company.
Sprint has said it may not survive in the long run unless it can merge with another carrier.
As Sprint's pending $26 billion merger with T-Mobile continues to face regulatory scrutiny, the nation's smallest nationwide carrier continues to chug along. Just how much longer it'll be able to do so independently remains a growing concern.
Sprint's fiscal fourth-quarter results aren't going to quell those questions. On Tuesday, the company reported a loss of $2.2 billion. Total subscribers fell by 8,000 for the quarter, down from a net addition of 48,000 subscribers in the third quarter.
The company added 169,000 devices in the quarter, though like other carriers it relied on 358,000 "data" devices such as tablets and wearables (mostly wearables) to offset losses of 189,000 phone users.
Sprint closed its fiscal 2018 with just under 54.5 million subscribers, down from slightly over 54.6 million users for its fiscal 2017.
Total revenue for the quarter was $8.44 billion, higher than the $8.21 billion analysts surveyed by Yahoo Finance expected.
Shares of Sprint were down over 2.7%, to $5.63, in after-hours trading.
"Sprint delivered on its plan for fiscal 2018, as we met all of our financial guidance for the year," Sprint CEO Michel Combes said in a statement. "While we've made progress, there are certainly continued challenges to address, which will continue to put pressure on our service revenue and retail customer growth."
The results come as Sprint awaits the fate of its pending merger with T-Mobile, which continues to hang in the air as the two companies press for approval. They argue that a combination would create a stronger No. 3 player to compete against AT&T and Verizon , and help supercharge their combined 5G rollout plans.
Since announcing its merger ambitions with T-Mobile last April, Sprint has also argued that it wouldn't be able to survive long-term without finding a partner. In January the company posted a fiscal third-quarter loss of $141 million.
In an earnings call with investors, Combes stressed the need for the merger to better compete with AT&T and Verizon on 5G.
Sprint has long been known for its aggressive offers, most recently offering those interested in trying its network the ability to do so risk-free for 30 days. If at the end of the month they aren't satisfied, they can leave Sprint and have all costs, fees and service charges fully refunded.
Though these promotions have been good at attracting attention and luring in prospective customers, making such aggressive moves does come at a high cost, particularly if the customers bolt at the end of the promotions.
In addition to the challenge of bringing in customers, the company also now has to deal with the costs of building and rolling out next-generation 5G networks to compete with AT&T, Verizon and T-Mobile.
Sprint has already announced plans to turn on 5G in 9 cities before the end of the first half of 2019, including in Chicago, Atlanta, Dallas and Kansas City this month. Though it has announced its first devices for its new network -- the LG V50 ThinQ 5G and Samsung Galaxy S10 5G phones and the HTC 5G Hub hotspot -- it has yet to reveal exactly when the network will be turned on or how much the 5G devices and services will cost.
In its earnings release the company said those first four cities will receive 5G in the "coming weeks," with Houston, Los Angeles, New York City, Phoenix and Washington, DC, getting the next generation network "by the end of June."