Sprint adds subscribers but losses mount

From CNET News.com: Sprint Nextel added more wireless customers during the third quarter of 2010 than it has since 2006 boosting revenue for the company, but it still managed to see losses widen as customer spending declined and it spent more to subsidize smartphones.

During the third quarter Sprint Nextel added a total of 644,000 new wireless subscribers of which 354,000 were new contract customers. The company also reported a churn rate or the rate at which people leave its service for a competitor of 1.93 percent for its contract customers. This is compared to a churn rate of 2.17 percent during the same quarter a year ago and 1.85 percent in the second quarter of 2010.

The additional customers boosted revenue to $8.15 billion compared to $8.04 billion during the same quarter last year. But despite the revenue growth, losses widened to $911 million or 30 cents a share compared to a loss of $478 million or 17 cents a share a year ago.

The biggest hit to the company's bottom line likely comes from subsidizing smartphones and other wireless equipment. Sprint spent almost $1.1 billion on subsidizing wireless equipment for customers. Compare this to approximately $950 million it spent during the same quarter last year subsidizing phones, and the $1.0 billion it spent in the second quarter of 2010.

Even though the subsidies cost Sprint a hefty price, the company paints a positive picture indicating that the subsidy charges are good long term because it means more customers:

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