Boston, MA 02/09/2013 (wallstreetpr) –The third-largest wireless carrier in the US, Sprint Nextel Corp. (NASDAQ:S) benefited from the higher use of Smart phones as it reported an increase in revenues, coupled with a loss that was a little under what analysts had predicted. According to a statement from the company, in the fourth-quarter, the net loss was 44 cents per share whereas the number that analysts had predicted was an average of 45 cents. Sales increased to $9.01 billion compared with an estimate of $8.93 billion on average.
The company’s shares dropped less than 1% today and closed at $5.74 in New York. Since October, the stock had traded between $5.40 and $6 and this was the time when Softbank Corp. (PINK:SFTBY) from Japan paid $20 billion for a stake of 70% in the company. This deal is expected to be completed by the middle of this year and it gives Sprint Nextel Corp. (NASDAQ:S) financial backing to grow in the US and give rivals like Verizon Communications Inc. (NASDAQ:VZ) and AT&T Inc. (NASDAQ:T) a run for their money.
In the last quarter, a total of 243,000 monthly contract customers left Sprint. To draw in more Smartphone subscribers, the company has to provide the same discounts that its rivals offer their subscribers, which has to be done by the subsidization of most of the cost of phones. The company will have to get its customers to use two-year contracts to make up for the loss of selling phones at a discount rate.
In an attempt to match its larger rivals, Sprint Nextel Corp. (NASDAQ:S) has come up with a plan known as Network Vision to upgrade infrastructure. To cater to the rising number of Smartphone and tablet users, the company is providing LTE (long-term evolution) which is a data network of high speed. Smartphone sales hurt short-term profit but are lucrative in the long run as they encourage subscribers to use more data.
The shares of Sprint Nextel Corp. (NASDAQ:S) were up by 0.52% to close at $5.77. Price of AT&T Inc. (NASDAQ:T) share prices maintained at $35.27. The shares of Verizon Communications Inc. (NASDAQ:VZ) were down by 0.25% to close at $44.35. The Softbank Corp. (Japan) (PINK:SFTBY) were down by 1.24% to close at $18.25.