Analysts a saying that marketing produced by Sprint Nextel has been unfocused combined with technical problems with their infrastructure. “We made good progress on our operational priorities in the third quarter and resolved some key issues,” he said. “Still, subscriber losses are too high.”

The nations third-largest wireless provider said it lost $326 million, or 11 cents per share, for the three months ending Sept. 30. It had earned $64 million, or 2 cents per share, in the same period a year ago.

Excluding one-time items, Sprint Nextel said it would have broken even during the quarter. On that basis, analysts surveyed by Thomson Reuters expected a profit of 3 cents per share.

Sprint Nextels revenue fell 12 percent to $8.81 billion. Analysts expected $8.85 billion.

The companys shares lost 31 cents, or 8 percent, to close Friday at $3.37.

Since its 2005 acquisition of Nextel Communications Inc., the company has struggled with technical problems, unfocused marketing and difficulties integrating operations. Despite heavy investments to correct those problems, Hesse said the company still suffers from poor perceptions in the market.

Competing devices, such as Apple Inc.s iPhone being sold through AT&T Inc., havent helped, although Sprint has fought back with the Samsung Instinct and other comparable smart phones.

Sprint Nextels wireless business reported a 13 percent decline in revenue to $7.5 billion as its subscriber base fell by 1.3 million. That included 1.1 million valuable “postpaid” customers who have contracts. That was worse than in the second quarter, when Sprint Nextel lost 901,000 subscribers, including 776,000 postpaid customers.

Postpaid churn, or the percentage of customers canceling service each month, was 2.1 percent, up from 2 percent in the previous quarter but below the 2.3 percent rate a year ago.

Hesse said the company would focus on slowing the losses of postpaid customers in the fourth quarter and expected the churn rate to be similar to the third quarter.

“Stabilizing revenue will be a focus area of ours going forward,” he said.

Also Friday, Sprint Nextel said it had changed the terms of its credit agreement, reducing the amount it can borrow to $4.5 billion from $6 billion but increasing the allowed debt ratio to 4.25 times earnings before taxes and other adjustments, up from 3.5 under the previous deal.

The company said it will pay higher interest under the new agreement and cannot pay cash dividends unless certain conditions are met. The company doesnt currently pay dividends to common shareholders.

Sprint also said it repaid $1 billion of the outstanding loan under the amended credit agreement.

Stifel Nicolaus analyst Christopher King said the debt moves likely would be viewed positively because they give Sprint Nextel “ample flexibility through the maturity of the agreement in 2010.”

Sprint Nextel sits behind AT&T and Verizon Wireless in third place with 50.5 million customers. It fell further behind in the third quarter as AT&T and Verizon Wireless added 2 million and 1.5 million subscribers, respectively. Both said most of their new customers defected from other carriers.

Source: cagra