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Sprint, looking ahead to merger with T-Mobile, adds customers

But its profit fell amid higher costs to nab those new subscribers.

Mysterious Sprint Spark phone

Sprint has one eye on its deal with T-Mobile. 

Lynn La/CNET

Sprint continues to chug along with modest customer growth. Not that it really matters. 

For the quarter just ended, the Overland Park, Kansas, wireless carrier posted total customer growth of 57,000 net new customers and, most importantly, 87,000 net new phone customers in the lucrative postpaid category. 

But ultimately, the results, announced Wednesday, are less relevant than its pending merger with T-Mobile. Sprint, the nation's fourth-largest carrier, has agreed to combine with No. 3 T-Mobile in a $26 billion deal that's expected to close in the first half of 2019, pending regulatory approvals. T-Mobile on Tuesday released a filing with the Securities and Exchange Commission that detailed the back-and-forth that went into the deal.

The merger can't come fast enough. Sprint, owned by Japanese carrier Softbank, has traditionally followed the larger three carriers, only seeing growth over the last few years thanks to aggressive tactics to win over consumers. In the second quarter, it introduced a crazy-low promotional $15-a-month plan that it lasted only a week. It still offers a year of free service to anyone willing to bring their own phone. 

Sprint's cozying up to T-Mobile comes amid a shift in wireless deals, as the carriers look to redefine the unlimited plan by folding in different tiers and options, including add-on video services and larger allotments of high-speed data. Even Sprint has introduced new plans that are costlier, but come with more options, following similar moves from AT&T and Verizon

CEO Michel Combes noted that the higher priced plans will pressure customer growth going forward, but he said the company plans to continue adding subscribers through the year. 

"We are pretty excited by our new unlimited plans," he said during an analyst conference call on Wednesday. "It seems our customers feel the same."

Check out the full breakdown of the unlimited plans here

Sprint did see its prepaid subscriber gains fall to just 3,000 in the period, compared with 35,000 a year ago. Combes said that while its Boost prepaid service performed well, its other prepaid arms saw losses. 

Sprint noted Wednesday that in the June quarter it saw its wireless service revenue grow sequentially for the first time in four years, although its results fell short of last year's performance. The company posted a net profit of $173 million, or 4 cents a share, compared with a year-ago gain of $206 million, or 5 cents a share. 

Revenue slipped 0.3 percent to $8.13 billion.

Sprint was expected to break even on revenue of $8.02 billion, according to Yahoo Finance.

Wall Street gave Sprint a pass in early trading, with shares rising 2.4 percent to $5.56 in pre-market action. 

The story originally ran at 4:40 a.m. PT.

Update, 6:25 a.m. PT: To include additional background and comment from the CEO. 

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