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Sprint sees sales slip as subscribers rise

Wireless carrier continues to struggle financially but sees welcome improvement in subscriber growth, thanks in part to demand for the new HTC Evo 4G smartphone.

Sprint Nextel's hot new phones are helping boost the number of subscribers for the first time in a long time. Even so, the company's second-quarter results were down.

For the quarter ended June 30, the wireless carrier reported a net loss of $760 million, compared with a loss of $384 million in the year-ago quarter. Sales dipped to $8.025 billion, a 1.4 percent decline from last year's $8.141 billlion.

The HTC Evo 4G helped Sprint gain subscribers. Sarah Tew/CNET

On the plus side, Sprint added 111,000 new wireless subscribers for the quarter, its first signs of growth in three years and a welcome improvement from past quarters when the company was shedding customers at a record pace.

Demand for smartphones such as the RIM BlackBerry Curve 8530 and the new HTC Evo 4G helped raise the number of new postpaid subscribers to 136,000 on the company's CDMA network and 285,000 for the Sprint brand.

Sprint also saw fewer people exiting its service for the quarter as it brought home its best-ever subscriber churn rate of only 1.85 percent, compared with 2.05 percent in the year-ago quarter. The churn rate for prepaid customers also showed improvement, dropping to 5.61 percent versus 6.38 percent a year ago.

Introduced during the second quarter, the Evo 4G was the first 4G smartphone to debut in the United States. Sprint added its 4G service to eight new markets during the quarter, reaching a total of 43 markets and potentially 51 million people across the U.S. The carrier expects to cover around 120 million people by the end of the year as its 4G partner Clearwire ramps up deployments in Boston, New York, San Francisco, and Washington, D.C.

Sprint recently announced its second 4G phone--the Samsung Epic 4G--for which it plans to reveal pricing and a release date in the next few months.

For the quarter, the company also made progress in customer satisfaction. After a long stretch of weak customer service and a shaky reputation, Sprint has strived to improve its image over the past couple of years, leading to recent awards and accolades from Gartner, Forrester, and the American Customer Satisfaction Index.

"Our intense focus for the past ten quarters on improving the customer experience, strengthening our brands, and generating cash are paying off," CEO Dan Hesse said in a statement. "With strong cash flow, stable OIBDA (operating income before depreciation and amortization), and widespread third-party recognition for the improvements we're making in the customer experience, which in turn strengthens our brands, we feel we can confidently improve our subscriber forecasts for the second half of 2010 and deliver positive total net wireless subscriber additions for the remainder of the year."