Sprint customers ebb as it awaits lifeline from T-Mobile

The carrier is keeping its head down, focusing on 5G.

Roger Cheng Former Executive Editor / Head of News
Roger Cheng (he/him/his) was the executive editor in charge of CNET News, managing everything from daily breaking news to in-depth investigative packages. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade and got his start writing and laying out pages at a local paper in Southern California. He's a devoted Trojan alum and thinks sleep is the perfect -- if unattainable -- hobby for a parent.
Expertise Mobile, 5G, Big Tech, Social Media Credentials
  • SABEW Best in Business 2011 Award for Breaking News Coverage, Eddie Award in 2020 for 5G coverage, runner-up National Arts & Entertainment Journalism Award for culture analysis.
Roger Cheng
3 min read

It's still just plain Sprint as the T-Mobile takeover takes its time. 

Lynn La/CNET

Sprint is in the midst of a "lame duck" session as it awaits a takeover by bigger rival T-Mobile. And it's been keeping itself busy with an upgrade to -- what else? -- 5G.

The smallest of the four national wireless carriers, which earlier this year struck a deal to be acquired by T-Mobile to create a larger No. 3 player, has been busy rolling out network upgrades to prepare for the next generation wireless network technology, which promises better speeds, capacity and responsiveness. 

Amid its work, Sprint reported fiscal second-quarter results that showed a slight slowdown in customers. The company lost 34,000 postpaid phone customers, or people who pay at the end of the month, and 20,000 total wireless customers. 

Sprint's results reflect a cooling down around the industry as carriers pull back on aggressive promotions, even with the launch of Apple's iPhones . Gone are the free iPhone deals -- carriers are content to dig in on preserving their customer base with select deals. As result, T-Mobile once again led the industry with customer growth, while Verizon also made decent gains. AT&T struggled to eke out a little phone growth, and Sprint, as usual, followed the pack.

Watch this: What the heck is a 5G network?

Sprint is still dealing with the ramifications of the lucrative offers it put out over the past two years, having slashed prices by half and even offering a full year of free service. These were plans put into effect by former CEO Marcelo Claure, who now works with parent Softbank and is helping to close the deal with T-Mobile. With many of those promotions expiring now, the company saw an uptick in turnover as customers left. 

"I fully believe that it was the right idea and the right thing to be done at the time it was done," CEO Michel Combes said on a media conference call on Wednesday. 

Under Combes, Sprint introduced a set of unlimited plans more in line with the industry, resulting in slower customer growth. Combes added he expects the pressure to continue into this current quarter. 

With its customer base waning, Sprint chose to focus on its growing wireless service revenue in the period. Excluding a new revenue accounting standard, it grew year over year for the first time in five  years. 

None of this matters if T-Mobile takes over the company. While Sprint has been working on its 5G network, and says that, in conjunction with LG , it will release the first 5G smartphone in the US, but T-Mobile has plans for Sprint's valuable stash of radio airwaves. T-Mobile said the two companies' spectrum combined could make for a potent 5G network, one of its key selling points for the merger. 

Analysts noted that Sprint's results were better than expected, but MoffettNathanson analyst Craig Moffett said there was little reason for optimism for the company if the T-Mobile deal were to fall through. 

For the period that ended Sept. 30, Sprint posted a profit of $196 million, or 5 cents a share, compared with a year-earlier loss of $48 million, or 1 cent a share. Revenue rose 6 percent to $8.43 billion.

Analysts, on average, had forecast a loss of 1 cent per share and revenue of $7.97 billion, according to Yahoo Finance.

The story originally published at 4:49 a.m. PT. 

Update, 7:28 a.m. PT: To include analyst and executive comments. 

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