And that’s more than you can say for AT&T and Verizon. Both companies sold far more iPhones than Sprint — AT&T sold 3.6 million; Verizon, 2.7 million — but they sold fewer of them than in the quarter prior. And they didn’t sell as many to customers new to their networks. Indeed, just a quarter of Verizon’s iPhone sales and 22 percent of AT&Ts were to new customers.

So, while Sprint’s $15 billion bet on the iPhone might be a costly one, it also seems to be paying off. Certainly that’s the opinion of CEO Dan Hesse.

“We are beginning to see benefits from the iPhone,” Hesse said during Sprint’s earnings call this morning. “Early life churn is better than on other smartphones, calls to care are significantly lower than on other devices, service and repair and returns are all lower than on other devices. All the important early metrics indicate we made the right decision. … We are ahead of the pace to meet our contracted commitments to Apple.”

Don’t worry so much. Apple doesn’t.

Remarking on the subsidy issue during the company’s second-quarter earnings call Tuesday, Cook dismissed it, essentially saying that the iPhone is so exceptionally profitable for carriers that they’re not likely to mess with it.

“From the carriers’ perspective, it’s important to remember the subsidy is not large relative to the payments across a two-year contract period,” Cook said. “Any delta between the iPhone and another phone is even smaller.”

Beyond that, there are a number of advantages to carrying the iPhone.

“A number of carriers have told me that churn from iPhone customers is lowest of any phone they sell,” Cook said. “That’s obviously a significant, direct financial benefit to the carrier.”

But the iPhone’s greatest advantage is this: It’s a device that customers want to use every day.

“At the end of the day, the vast majority of carriers want to provide what their customer want to buy,” Cook said. “That’s what motivates them. … The iPhone is the best smartphone on the planet to entice a customer who is currently using a traditional phone to upgrade to a smartphone. This is by far the largest opportunity for Apple and our carrier partners. It’s a win-win. All of these factors are missed in this discussion of subsidy.”

For the three months ended Dec. 31, Sprint lost $1.3 billion, or 43 cents per share, on revenue of $8.7 billion. That compares to a loss of $929 million, or 31 cents per share, on revenue of $8.3 billion for the same quarter a year earlier. It’s also a much wider loss than in the prior quarter.

“Our strong fourth quarter performance illustrates the power of matching iconic devices like the iPhone with our simple, unlimited plans and industry-leading customer experience,” CEO Dan Hesse said in a statement. “During the past year, Sprint added more than 5 million net new customers and grew wireless service revenue by more than 5 percent, including 17 percent for the Sprint platform. This momentum gives us confidence as we execute our Network Vision upgrade and 4G LTE roll-out.”

The company added more than 1.6 million customers overall during the quarter, including both prepaid, wholesale and contract customers.

Sprint also added two more cities — Baltimore and its hometown of Kansas City — to the roster of launch markets for the company’s LTE service, which will begin around midyear. It will also launch service in Houston, Dallas, San Antonio and Atlanta at that time.

The San Francisco social games company is looking to raise as much as $1.15 billion, which would make it the largest IPO from a U.S. Internet company since Google raised $1.7 billion in 2004.

Shares will likely be sold on Thursday, with the company trading under the ticker ZNGA for the first time on Friday. In the meantime, the company is trying to jockey for the best price and the most shares sold.

At a luncheon yesterday with potential investors, CEO Mark Pincus made one of his boldest predictions yet when it comes to how well its games will monetize.

Currently, Zynga has about 227 million monthly active users who play games for free on Facebook, such as FarmVille, CityVille, Zynga Poker and Mafia Wars. But only a small fraction — around 3 percent — pay for additional features, such as decorative items for a farm or new clothes for an avatar.

“We could see that doubling,” said Pincus, according to Reuters.

Doubling? That’s sure to whet investors’ appetites.

But it’s hard to know how the company will accomplish that.

To be sure, Zynga is about to enter one of its biggest growth periods yet and anticipates launching several new games over the next few months.

On one level, more games will likely translate to more players. But will it translate to more players willing to pay?

That seems like a leap of faith.

However, based on documents filed with the Securities & Exchange Commission, we have gleaned that some of Zynga’s growth prospects are guaranteed thanks to the company’s close – albeit complicated – relationship with Facebook.

As one of the conditions of its partnerships, Facebook is obligated to help Zynga meet certain growth targets. In return, Zynga has committed to offering Facebook a number of exclusive game titles.

The specific details of the relationship were redacted in the document, so it’s not clear how aggressive those growth targets are over the five-year life of the contract.

Zynga also has close ties with Google, which has recently launched its own games network. Zynga has already launched several titles there, including CityVille. Following the offering, Google will own 3.8 percent of the company.

Also during yesterday’s lunch, Zynga’s executives were grilled about player retention and churn rates and its growth prospects for mobile.

Among several responses, Pincus joked about how Alec Baldwin was recently kicked off a flight after getting caught playing Words With Friends while still at the gate.

It seemed investors were not as interested in hearing about recent negative reports that Pincus’s hard-charging personality has made it an unfavorable working environment or that some employees were asked to give up their stock options.

Plus, it’s a crowd that Pincus should be comfortable speaking in front of. This will be the second company the Wharton and Harvard Business School grad has taken public.

The company will continue to have meetings today and into next week. So far, reports indicate that the conversations are going well.

Zynga has apparently already received enough orders to cover all the shares being sold in its initial public offering, reports BusinessWeek, which talked to two people with knowledge of the situation. Zynga plans to sell 100 million shares for $8.50 to $10 apiece, which would value the company at as much as $7 billion.

Lurie says that total churn — the number of customers who cancel service — has remained largely unchanged since Apple inked its deals with Verizon and Sprint. “Churn has not moved at all,” Lurie claims.

In other words, iPhone users are sticking with AT&T, though they now have two more carrier options, and few good reasons for that loyalty. Remember, it wasn’t so long ago that iPhone users’ biggest complaint was AT&T.

The company said it lost $847 million, or 28 cents per share, on revenue of $8.3 billion for the three months ended June 30. That compared to a net loss of $760 million, or 25 cents per share, on revenue of $8 billion in the year-ago quarter.

Shares of Sprint were trading lower in premarket trading, changing hands recently at $4.53, down 63 cents or more than 12 percent.

On the customer side, much of Sprint’s gains were via wholesale and prepaid customers, with the company reporting a loss of about 101,000 net postpaid subscribers during the quarter. Though still losing postpaid customers, Sprint cut the rate by more than half from what it was posted in the second quarter of 2010. The company said its postpaid churn rate for the quarter was a best-ever 1.75 percent, smaller than the 1.85 percent from a year ago, and 1.81 percent in the first quarter of this year. The lower churn came as nine percent of Sprint’s core postpaid customers upgraded their phones during the quarter.

The company reaffirmed its full-year forecast issued in April, saying it expects to add postpaid subscribers for the full year and to add more wireless customers overall this year than it added last year. Capital expenses excluding interest should be about $3 billion, and the company said it expects positive cash flow for the second through fourth quarters and for 2011 as a whole.

As for the LightSquared deal, it’s a 15-year agreement that has each making a number of commitments and giving Sprint additional options when it comes to offering high-speed wireless services to customers. LightSquared will pay Sprint about $9 billion in cash for providing 3G roaming, spectrum hosting and network services, and will give Sprint $4.5 billion in credit for use on LightSquared’s forthcoming satellite and LTE networks.

Sprint has the option of using up to 50 percent of LightSquared’s expected 4G capacity in the so-called “L band.”

With the agreement, LightSquared said it expects to have its first 4G LTE services available in the second half of 2012. Sprint said it will talk more about its 4G plans at an Oct. 7 investor day event.

Dan Hays, a partner at management consulting firm PRTM, said the deal should benefit both companies, as LightSquared can host its 4G network within Sprint’s next-generation cell sites.

“For Sprint, this will defray a significant portion of its planned capital investment and deliver increased cash flow while providing an opportunity to tap into LightSquared’s competitive 4G technology,” Hays said in a statement. “For LightSquared, this deal will dramatically reduce the cost and time required to deploy its nationwide, mobile broadband network to hundreds of millions of Americans.”

Hays also said the 3G roaming piece of the deal should help LightSquared, as it allows the company to offer partners nationwide service from the outset.

LightSquared still faces significant financial and regulatory challenges in building its network, including concerns that it poses interference with GPS systems. LightSquared has said it has a plan that should significantly reduce such interference.

During the period, the company lost more than 300,000 contract customers and some 23,000 customers overall.

“High contract churn and significant contract customer losses in the fourth quarter of 2010 indicate that we still have a fair amount of work ahead of us and that any turnaround will take time,” CEO Phillip Humm. “With the ongoing implementation of our challenger strategy we are laying the foundation for improved performance going forward.”

The company did see its revenue increase slightly as the company continues to get more dollars per customer as the shift to smartphones continues. Service revenue for the fourth quarter was $4.69 billion compared to $4.65 billion a year earlier, though it dipped from $4.71 billion in the third quarter.

In both ads and executive comments, T-Mobile has been talking tough vis a vis its rivals. However, like Sprint, it is showing up to the fight without an iPhone on its side.

Last month, Humm told Mobilized that the carrier was going back to its roots, pitching itself as the best value on the market.

Lacking a next-generation network, the company is also trying to keep pace by introducing ever faster versions of its HSPA-plus network, with plans to further increase the speed of that network this year. Longer term, the company needs additional spectrum to build an LTE network like those being built by Verizon and AT&T.

Posting fourth-quarter earnings this morning, Sprint said it added 1.1 million total wireless subscribers, 58,000 of them two-year contract customers. Quite a milestone for a company that hasn’t seen a gain in postpaid subscribers in 13 quarters and a sign that Sprint may finally be turning a corner. Another good sign: Postpaid churn fell to 1.86 percent from 2.11 percent in the third quarter, and prepaid churn fell to 4.93 percent from 5.32 percent. And another: For the quarter, Sprint added almost 1.1 million wireless subscribers, its best showing in nearly five years.

All welcome news, even if Sprint is still losing money. The company reported a fourth-quarter loss of $929 million, or 31 cents a share, on revenue of $8.3 billion, up from $7.9 billion a year ago. Analysts polled by Thomson Reuters most recently forecast a loss of 30 cents a share on $8.15 billion in revenue. Said Bernstein analyst Craig Moffett, “Sprint CEO Dan Hesse might be forgiven for the temptation to hang a “Mission Accomplished” banner on the aircraft carrier that is Sprint. To his credit, he expressly declined to do so. Still, the company has at last achieved post-paid and total subscriber growth, customer service levels have improved, churn rates have been brought under control, and revenues were up.”

At $4.41, Sprint shares are up 1.15 percent in early trading as I write this.

That’s according to Susquehanna analyst Jeffrey Fidacaro (and AT&T, which confirmed that percentage to me), who doesn’t see the launch of the iPhone on Verizon as a catastrophic event for AT&T at all. He thinks the carrier stands to lose two million iPhone users at most to Verizon–hardly a mass exodus.

AT&T’s decision last year to accelerate upgrade eligibility for iPhone customers, making it easier for them to get the iPhone 4 when Apple released it, is proving a wise move indeed. What better deterrent to switching networks than the carrier’s $325 early termination fee?

In all likelihood, iPhone subscriber churn will be no worse at AT&T than it has been at other carriers that have lost iPhone exclusivity. As Matthew Key, CEO of Telefónica Europe, said during a February 2010 earnings call, “Ever since Vodafone has started selling the iPhone in January, we see absolutely no evidence of people leaving us, churning on the iPhone going back to Orange or Vodafone, so [we are] very comfortable with our iPhone volumes. We continue to out-trade the market and no sign of churn whatsoever.”

“T-Mobile is ideally positioned to grow in the expanding U.S. market with the mobile Internet, if possible to a disproportionately large extent,” T-Mobile Group CEO Rene Obermann said in a statement issued by parent company Deutsche Telekom. “Philipp Humm and his team have a broad-based strategy to put T-Mobile USA back on course for growth.”

Among its plans are to offer the most competitive data rates while also introducing a faster version of its HSPA+ network, the one T-Mobile bills as America’s largest 4G network. Lacking an iPhone to offer, T-Mobile has been running a pointed ad campaign poking fun at AT&T and, more recently, also at Verizon.

T-Mobile also hopes to boost its fortunes by increasing sales efforts to businesses and allowing other carriers–so-called MVNOs–to sell services on its network.

The company reiterated its plans to eventually move to a Long-Term Evolution network (the same technology being adopted by Verizon and AT&T). However T-Mobile said this will “probably not be for a few years.”

While T-Mobile spoke to the business and technical hurdles associated with moving too quickly to LTE, it also acknowledged the other big stumbling block–it lacks enough spectrum to do so.

“Deutsche Telekom is exploring various options to acquire additional spectrum and reduce the gap regarding economies of scale compared with its larger competitors, including partnering with other companies,” T-Mobile said.

T-Mobile also announced the Samsung Galaxy S 4G and said it would bring back the Sidekick brand with a 4G, Android-based device to be introduced in the spring.

Not only will the Verizon iPhone likely draw new wireless subscribers away from Sprint (and T-Mobile, for that matter), it will boost its churn rate as well. Compounding that effect will be AT&T’s reaction to its loss of iPhone exclusivity and its efforts to hold on to subscribers it fears might defect to Verizon. As Bernstein Research analyst Craig Moffet noted today, AT&T’s not going to stand idly by as Verizon woos away its customers.

“Already in 2Q and 3Q 2010, AT&T partially pre-empted Verizon’s iPhone introduction by upgrading a massive number of its iPhone subscribers, so as to lock them into new 2-year contracts,” Moffet observed in a note to clients today. “This amounts to a massive re-subsidization of existing subscribers, sacrificing margins for subscriber retention. When the actual iPhone introduction at Verizon occurs, AT&T is likely to react further, with more aggressive phone subsidies, incremental advertising, the introduction of other compelling devices, and possibly with price cuts.”

And when it does, Sprint’s share of industry gross additions will inevitably decline.

There’s a wild card here, though: The special event that Sprint has planned for February. If what the company shows off there truly is the industry first it’s promising (and let’s be clear: It’s almost certainly not going to be another CDMA iPhone), perhaps it will indeed make the “impossible possible”–helping Sprint limit subscriber churn in the face of the Verizon iPhone.

Unfortunate news, particularly since that loss compares to a profit of $1.48 billion, or 52 cents a share, a year earlier. That said, excluding one-time items, Verizon earned 58 cents a share, which was better than the 56 cents analysts had been looking for.

And the company’s wireless business is booming. Verizon Wireless added a better-than-expected 1.4 million net customers, with about 665,000 of them opting for annual contracts. Those customers are spending more each month–$51.56, up 0.9 percent from the previous quarter. They’re also canceling service far less often. Subscriber churn fell to .94 percent–the lowest it’s been in nearly two years.

After BoomTown complained at December’s search summit held by Bing about the lack of the finest pastry known to man–namely, donuts!–minions were dispatched by top Microsoft geek general Satya Nadella to fix the dire situation.

And, happily, at Search Summit 2010, there on the lovely snack table were a small pile of them–which looked like Krispy Kreme to me.

There were lacking the key sprinkles feature, but carb crisis averted!

Speaking of features, top Bing execs were on hand in San Francisco to show off all the work they have been doing over the last year in the software giant’s efforts to topple mean old Google (GOOG) via an innovative offering.

Even the plain-speaking Nadella acknowledged in his opening it was still a bit of a children’s crusade, since Bing had barely broken into double digits in search market share and Google was hovering around 70 percent.

But the most recent report released this week by comScore (SCOR) showed continued promise, so Microsoft (MSFT) presses on its long and pricey road!

Here’s my liveblog of this morning’s event at the software giant’s San Francisco office:

10 am PT: Nadella opened with the donuts news. Nice move.

Then, it was onto some promising stats of growth, which have surely been promising, despite the high price tag (Microsoft’s online division lost $700 million in the last quarter, to give you an idea of the sticker shock).

Still, as search exec Brian MacDonald said, as he was presenting all the many new features–such as cards–added over the last year: “We’re in it to win it.”

At the end of his presentation, in a slide title “Future,” he said reporters could not take pictures or video. Sure, hop us up on sugar and then tell us something interesting and bar us from taking snaps!

But MacDonald clicked through the images so fast, it was hard to tell what Bing would be up to. Essentially, it looks like a more blocky, image-heavy design, with more differing fonts and contextual info.

10:40 am PT: A smart search geek Harry Shum was then on with a lecture about search intent and all kinds of insider tweakery that made me confused, since I do not understand terms such as “page-level dialog.” There is also apparently “session-level dialog.”

Harry knows what it all means, which is pretty much all that counts.

My take: It has to do with some sort of digital conversation Bing search dudes are having with the users that users have no idea is actually going on.

Simply put: They’re watching you.

11 am PT: Next search guy talked about search intent and such.

That means adding features such as a link to search history or instant weather on the opening page. It’s the little touches that count.

In fact, they do, as Bing tries to differentiate itself from what Google offers, via a series of neat tricks and clever design.

That includes, for example, easy access to lyrics and song classifiers, when searching in music.

Lady Gaga’s “Poker Face” was used as an example, since Lady Gaga seems to be the go-to gal on seeming cool these days.

(But is it time to check Bing search trends to see if she is peaked?)

11:19 am: Next, top Online Services Division exec Erik Jorgensen came on to discuss mobile and mapping. He compared himself with “Edward Scissorhands” when talking about how hard it is to have a good experience on a small device.

“Type less, do more,” is the internal mantra at Bing, he said. Coincidentally, my mantra is type more, do less.

Jorgensen showed off Bing mobile stats: 23 million users, 160 percent growth and four million downloads of its iPhone app. Yes, it has come to this–Microsoft using Apple (AAPL) to tout its success.

Then it was onto mapping, which is a pretty good arena for Bing. Stats: 41 percent growth in U.S. unique users, 43 percent rise in searches using enhanced maps, a huge boost in map apps.

11:29 am: Bing Maps guru Blaise Aguera y Arcas–who has the single most sexy name in all of geekdom–said the focus is now on social location.

As in Foursquare!

In fact, he showed off a map in which Foursquare check-ins pour in and pop up in a bit of a freaky way, as in: You can stalk in real-time.

Then it was onto cool mapping eye-candy, which I always fall for since the whole zoom-in-zoom-out thing is mesmerizing. Aguera y Arcas showed off clickable geographic names and embedded maps within maps from, in this case, a zoo or a museum.

11:50 am: Q&A Time!

The first question is about gaming. It’s hot said Nadella, and Bing wants to provide discovery and search more than games themselves.

I asked a question about the status of the Yahoo (YHOO) search partnership deal, which is in process. It is a very complex process, in fact.

And, though they were supposed to be in tandem, Nadella said that algorithm would move faster than advertising technology handover.

“If there were a drop of of advertisers [due to the new deal], that would be problematic,” he said.

Yes, which segued into the next obvious topic: When would Bing make some dough?

Thus. I asked about the high costs of competing in the search space, which Nadella said would continue, including distribution deals and in the aggressive marketing of Bing.

“For sure, we had to ante up,” he said. “But the product has to be able to stand on its own…ultimately, the product has to carry the day.”

More questions about distribution, social search, churn, product differentiation and whether Bing is growing from a more passive user to building a “fan base.”

BoomTown brainstorm: If they handed out delicious donuts with each search, I’d leave Google in a New York minute.

But, like a skunk at a garden party, I asked another question about when Bing is going to break even.

Nadella was too smart to answer this digital hot potato.

“It’s a big market where money can we made, and we are making progress,” he said, saying I should ask his bosses about specifics.

I shall!

In this vein, someone then asked a question about whether Bing would ever become a verb as Google has become.

Shum joked that in the future six letters would be too many for people to say, so things were looking up for four-letter search brands!

More questions included whether Google was tweaked by Bing yet (yep!), and whether Bing should try to win in an international market to show some muscle (U.S. is still top focus).

Finally, it was “time to deploy the cream puffs,” said a Microsoft PR honcho.

Long past time, I’d say.

Says Ratcliffe: “Channel checks by our communications equipment and semiconductor research partners give us greater confidence that Verizon will get an iPhone in early 2011, and we are now incorporating that belief into our models for AT&T and Verizon.”

Interestingly, Ratcliffe doesn’t see the end of AT&T’s iPhone-exclusivity deal with Apple (AAPL) heralding a subscriber exodus at the carrier. While he acknowledges that perception issues with AT&T’s network quality will inevitably drive some customers to flee to Verizon, he believes that many will stay put.

All told, the analyst expects approximately 500,000 to one million “switchers,” a relatively small portion of the nine million iPhones he says Verizon will activate in 2011 (click on charts below to enlarge).

“We don’t believe that the addition of a Verizon iPhone will be a seismic event in the wireless competitive environment, although we do expect it to result in a modest spike in AT&T churn, as customers who love their iPhones but have become unhappy with AT&T’s network take advantage of the alternative,” Ratcliffe writes.

“Overall, however, we believe that smartphone customers are relatively sticky, particularly given that (a) 70% of AT&T postpaid customers are on family plans (which would necessitate a group switch), (b) switching cost for customers currently in contract would be $375-525 per handset, (c) approximately 40% of handsets are covered under corporate discount arrangements, many of which may not have VZ equivalents, (d) for many, if not most iPhone customers, the service quality being delivered on the AT&T network is in reality comparable to what they’d receive on Verizon’s network, and (e) switching will likely result in accepting a bandwidth-capped data offering, since (we believe) that Verizon is likely to launch tiered bandwidth pricing prior to the launch of an iPhone.”

So, while the expiration of AT&T’s iPhone-exclusivity deal certainly won’t be good news for the carrier, it’s not going to be a disaster. Ratcliffe figures the carrier will still activate six million iPhones in 2011, which is quite a bit fewer than the 10 million he says it will activate this year, but a sizable number nonetheless.

This morning, the retailer cut the price of iPhone 3GS devices with 16 gigabytes of memory from $197 to $97 with a two-year service contract. Wal-Mart claims the reduction is simply part of its “ongoing aggressive savings announcements.” But coming as it does amid speculation about the launch of a new iPhone (and rumors of the discontinuation of the 8GB iPhone 3G), it is being interpreted as a move to clear out inventory before that device arrives at market.

Meanwhile, Apple (AAPL) and AT&T (T) continue to sell the 16GB iPhone 3GS at its original price, though I can’t imagine that this will continue much longer. When Apple introduced the iPhone 3GS in June 2009, AT&T slashed the price of the entry-level 8GB iPhone 3G to $99.

The company is expected to do the same thing this year with the low-end 3GS. And, as it did last year, that price cut will likely spur adoption of the device among the lower tiers of AT&T’s customer base. As BTIG Research analyst Walter Piecyk observed in a note to clients this morning:

We estimate that last years price cut of the iPhone 3G to $99 stimulated more than 3 million phone sales to existing AT&T customers that helped the company further penetrate the family plan with higher ARPU, lower churn customers. We believe the impact could be even larger this year for AT&T given its the broad market acceptance of the iPhone, the halo impact of the iPad and the installed base of iPhones that will need to be upgraded to a 3GS phone in order to benefit from Apple’s latest upgrade to its iPhone OS 4.0.

Perhaps it’s time to rethink that one, argues Barclays Capital’s Douglas Anmuth. The analyst has downgraded Netflix (NFLX) for primarily technical reasons, but along the way, he makes a good point about the company’s well-received app for Apple’s (AAPL) new gadget: It’s pretty awesome, but it may not generate many subscriptions for the movie rental service.

Why? Because Anmuth thinks just about everyone who has an iPad already has a Netflix subscription.

We view the new iPad app positively as it should help increase the value of a Netflix subscription and result in more loyalty and less churn, but we do not view it as a major driver of subscriber growth, especially given that many iPad purchasers are likely already Netflix subscribers. The large install base of the iPhone (48 million globally) could be more material with the pending app, but we believe consumers would generally prefer to view content on a bigger screen.

Time for some crowd-sourced opinion polling: Anyone out there who has an iPad and the Netflix app? Anyone who has bought a subscription because of the app? Anyone out there waiting to subscribe until the app comes to the iPhone?

To hear that AT&T (T) ranked dead last in customer satisfaction in high-profile markets like New York and San Francisco isn’t all that surprising. New Yorkers often carp about dropped AT&T calls, and complaints about lousy service in the Bay Area are legion.

But to find that the carrier placed last in 17 other cities as well suggests that AT&T’s shortcomings are more widespread than the carrier would have us believe and not simply the product of a high concentration of iPhones in the country’s larger cities.

As Pali analyst Walter Piecyk wrote in an investor note this morning, “We believe it has been an elitist investor view that only a few high profile AT&T markets are having problems on the theory that only ‘tech savvy’ residents of coastal cities would find enough use in the iPhone to impact the quality of AT&T’s network.”

It certainly would appear that way. With low marks for several key indicators of customer satisfaction–including service availability, circuit capacity, dropped-call frequency and voice service–across 73 percent of the markets Consumer Reports surveyed, it’s pretty clear that AT&T has become overextended by the popularity of the iPhone. Which is bad news for the carrier and, of course, for iPhone owners as well.

As Consumer reports notes, “Apple’s iPhones are the top smart phones in our Ratings–actually, among the best of all phones we tested, period–but their exclusive carrier, AT&T, was middling at best in satisfaction….If you’re readying to buy Apple’s phone, prepare for possible disappointment with its service and expect to love the phone anyway. Despite the network problems, a staggering 98 percent of iPhone users in our cell-phone-buying survey were satisfied enough to say they would definitely or probably buy the phone again. Only 79 percent of respondents who bought other cell phones said the same.”

Verizon (VZ), which has been mercilessly slamming AT&T’s service in a recent ad campaign, is going to have a field day with this. And somehow, I don’t think a hurriedly cobbled together Luke Wilson ad will undo the damage.

UPDATE: Reached for comment, AT&T had this to say about Consumer Reports’ findings, which, the company stressed, were based on anecdotal feedback from a self-selected group of subscribers: “We appreciate and value all customer feedback. We learn from it and it helps us serve our customers better. Without question the surest indication of customer satisfaction is churn, or turnover. For the last quarter, our postpaid churn was just 1.17 percent.”

Absent one-time charges, the company broke even for the quarter. Analysts had been expecting a two-cent loss on revenue of $609 million.

Good news, but it was tempered with a bit of bad. Because Sirius’s (SIRI) subscriber growth is slowing. The company ended the quarter with 18.5 million total subscribers. That’s up 103,000 from the second quarter, but down 2.1 percent from a year earlier.

“We are very pleased with what we accomplished during the third quarter, especially when considering the macroeconomic issues affecting consumers and the auto industry,” Sirius CEO Mel Karmazin said in a statement.

“We managed to grow revenue, grow ARPU, reduce operating costs, increase adjusted income from operations significantly, and refinance higher cost debt,” Karmazin added. “We look forward to continuing this performance. We grew subscribers and improved churn in the quarter, and we are well positioned to take advantage of an economic rebound. We expect to grow subscribers, revenue, and cash flow next year regardless of the magnitude of any recovery.”

TiVo’s (TIVO) complaint seeks both damages for past infringement and a permanent injunction–similar to the one it won against satellite provider Dish Network (DISH)–that would force AT&T (T) and Verizon (VZ) to shut down their DVR services.

“Attempts were made to reach a commercial arrangement,” TiVo CEO Tom Rogers said during an earnings call today. “They were not reached. We believe we are being caused irreparable harm and that harm increases everyday this doesn’t cease. We have found ourselves in a similar situation with AT&T and Verizon. We need to stop their continued unauthorized use of our intellectual property.”

And, God willing, corral them into that commercial arrangement to which Rogers refers. After all, the company lost 146,000 subscribers in its second quarter. It desperately needs to do something to win new ones and lower its churn.

[Image credit: Flickr/montevino]

During a call with analysts Thursday to discuss second-quarter earnings, Sirius CEO Mel Karmazin said the app, which is currently the iTune App Store’s fourth most popular app in the music category and the 88th most popular overall, was intended more as a means of tempering subscriber churn than a means of driving new subscriptions.

“…unlike an awful lot of applications on the iPhone…we’re not offering free service,” Karmazin said. “What we are offering is the free download and a week’s trial, so this was never designed that we believe we were going to get a significant number of new subscribers. We are seeing an increase in the number of subscribers who are signing up for the $2.99 fee, to be able to stream the product in addition to having it, so a satellite radio subscriber who also has an iPhone is now able to do that with an incremental $2.99.”

So the app is bringing in some new revenue. How much isn’t clear though, since Sirius doesn’t break iPhone app numbers (subscribers or revenue) out. Karmazin admits, however, that it’s not much. “You should not consider them to be a very significant number related to our number of subscribers,” he said, adding, “It’s the right thing for us to do, we continue to believe in it, we’ll continue to do more of these things.”

During a call with analysts Thursday to discuss second-quarter earnings, Sirius CEO Mel Karmazin said the app, which is currently the iTune App Store’s fourth most popular app in the music category and the 88th most popular overall, was intended more as a means of tempering subscriber churn than a means of driving new subscriptions.

“…unlike an awful lot of applications on the iPhone…we’re not offering free service,” Karmazin said. “What we are offering is the free download and a week’s trial, so this was never designed that we believe we were going to get a significant number of new subscribers. We are seeing an increase in the number of subscribers who are signing up for the $2.99 fee, to be able to stream the product in addition to having it, so a satellite radio subscriber who also has an iPhone is now able to do that with an incremental $2.99.”

So the app is bringing in some new revenue. How much isn’t clear though, since Sirius doesn’t break iPhone app numbers (subscribers or revenue) out. Karmazin admits, however, that it’s not much. “You should not consider them to be a very significant number related to our number of subscribers,” he said, adding, “It’s the right thing for us to do, we continue to believe in it, we’ll continue to do more of these things.”

Q2 revenue rose 27 percent, the company said, to $859.6 million, in line with the average $861.7 million estimate, while profit per share of 7 cents was half what analysts were looking for. The company reiterated an outlook for net subscriber additions this year of 1.4 million to 1.7 million.

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Reporting second-quarter earnings this morning (release, investor presentation), Sprint (S) posted a loss of $384 million, or 13 cents a share as customers defected to rival carriers. Revenue tumbled 10 percent to $8.14 billion.

Analysts surveyed by Thomson Reuters expected a loss of two cents on revenue of $8.13 billion.

A nasty miss, and one made worse by the loss of 991,000 subscribers in the crucial postpaid category. This after the troubled wireless carrier lost more than one million postpaids in the first quarter of 2009 and 1.27 million in the quarter prior to that. Sprint’s total subscriber count today: 48.8 million. As I said earlier this year, Sprint is hemorrhaging subscribers like Dan Ackroyd’s exsanguinating Julia Child.

And the Pre hasn’t done much to stanch the bleeding, though CEO Dan Hesse says Palm’s (PALM) smartphone has helped some. “In the second quarter, we made further progress on our efforts to enhance financial stability, improve the customer experience and reinvigorate the brand,” he said in a statement. “The widespread visibility surrounding our record-breaking June launch of the Palm Pre handset gave us an unprecedented opportunity to showcase these improvements to customers as ‘a new Sprint.’”

Indeed. Too bad so few people seem to be interested in them.

UPDATE:
During a conference call with analysts, Hesse suffered a barrage of questions about the Pre, its sales and how Sprint is faring against the iPhone 3GS. He declined to provide sales figures for the Pre and said only that its introduction has helped stave off customer churn. “I don’t want you to think there’s no impact from the iPhone,” he said. “It’s a successful device, but we’ve mitigated the impact with a strong device lineup.”