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Typically, the major carriers, including AT&T, Verizon, Sprint and T-Mobile, see some shift in their share but manage to post a cumulative gain in so-called postpaid customers.

This quarter, though, gains at Verizon and AT&T weren’t enough to offset the steep losses at T-Mobile, Sprint and other carriers. T-Mobile alone lost half a million contract customers in the January-to-March quarter, while Sprint lost 192,000 contract customers.

The Associated Press did the math and calculated a drop in the industry of 52,000 contract subscribers at the top seven carriers. That contrasts with the prepaid industry (both from the Big Four carriers and smaller players such as MetroPCS, Cricket and TracFone), which saw gains of two million customers in the quarter.

As brokerage Jefferies & Company noted ahead of the earnings report season, the cellphone industry tends to face a tough few months after the initial bump that follows the introduction of a new iPhone.

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“Pending regulatory approval, T-Mobile will receive spectrum from Leap in several markets in Alabama, Illinois, Missouri and Minnesota, and Leap will receive spectrum from T-Mobile in Phoenix, AZ and Houston, Galveston and Bryan-College Station, TX,” T-Mobile said in a statement. “Additionally, the companies will exchange spectrum in Philadelphia, Wilmington, DE and Atlantic City, NJ as well as several markets in Texas and New Mexico.”

The move will help T-Mobile as it looks to modernize its network and add LTE service by next year, T-Mobile said.

T-Mobile said that the two companies jointly filed an application for the spectrum transfer with the Federal Communications Commission last week.

For its part, Leap said the move would also help with its LTE efforts. Leap sells wireless service under the Cricket brand name.

“As we have previously announced, we plan to cover approximately two-thirds of our current network footprint with LTE technology over the next two to three years,” Leap CEO Doug Hutcheson said in a statement. “In addition the transactions will allow us to re-align spectrum in key markets into contiguous channels thereby optimizing our delivery of wireless services.”

Financial terms of the deal were not disclosed.

Leap and T-Mobile have been mentioned (along with many other combinations) as potential deal partners in the wake of AT&T’s failed T-Mobile acquisition. However, Monday’s deal was a fairly small-scale arrangement limited to exchanging some frequencies.

Clearwire has been hunting wholesale customers since at least September, when Chief Executive, Erik Prusch, said he was in discussions with AT&T Inc., Verizon Wireless and MetroPCS Communications Inc. Leap, which operates the Cricket brand, is the smallest U.S. carrier with a national reach, with roughly half the customers of MetroPCS, its nearest competitor.

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The company said it lost $84.4 million, or $1.10 per share, on revenue of $767 million. That compares to a $249.4 million loss, or $3.28 per share, on revenue of $708 million, in the fourth quarter of 2010.

Leap said it added 179,000 net new customers in the quarter compared to 107,000 net customer additions in the year-ago quarter. It also said 60 percent of new handset sales in the most recent quarter were either smartphones or devices that connect to the company’s Muve Music unlimited music service.

That’s helping the company drive up its average monthly revenue per customer, which reached $42.09 in the fourth quarter, up 10 percent from a year ago and 2 percent sequentially.

“We had solid performance in the fourth quarter and are pleased with the operational progress the business has made,” CEO Doug Hutcheson said in a statement. “Churn performance was solid, despite some billing system disruptions that affected both new sales and existing customers in the quarter.”

The company has also announced plans for its first LTE market — Tucson, Ariz. — and said it plans for the high-speed network to reach 25 million potential customers by the end of the year. Leap, once a regional player, is also taking the Cricket brand nationwide.

With AT&T having failed in its bid to acquire T-Mobile USA, some have seen Leap as a potential acquisition target for Ma Bell.

The company, which sells prepaid phones and service under the Cricket brand, said on Wednesday night that it will soon start selling a variety of phones across the country via Best Buy and other retailers. Among the products it will sell are phones with the company’s unique Muve Music service.

Enabling the expansion is a deal that Leap has with Sprint, allowing it to sell Cricket even in cities where it doesn’t have its own services available.

“This is a significant milestone in the plans we announced last year to create a new, hybrid wholesale and facilities-based model that is unique in the wireless industry,” Leap CEO Doug Hutcheson said in a statement. “We are excited to bring Cricket’s innovative wireless products to a large group of consumers who until now have not been able to take advantage of the tremendous value these products provide.”

Best Buy will start selling devices beginning Sept. 25, with other retailers following over the next two months including select Wal-mart stores, Dollar General stores as well as HSN.

In conjunction with the expansion, Cricket is adding some new phones to its lineup, including the Score, an Android phone from China’s ZTE and, later this year, a Muve-compatible feature phone called the Chorus.

The start-up, backed by Greylock Partners, Sequoia Capital, Globespan Capital Partners and Jafco Ventures, tapped McLaughlin in a sign that it is gearing up for an IPO. I talked today with Asheem Chandna, a Palo Alto Networks director and partner at Greylock, about the new hire and about the crazy growth the company is going through right now.

AllThingsD: Asheem, I always ask people to start at the top: What is Palo Alto Networks and what does it do?

Asheem Chandna: We’re in the network security space. We build next-generation firewalls technologies. We ship an appliance that contains some subscription services on it so in a way it combines the business model of Cisco with that of Salesforce.com.

And how big is the business?

We disclosed that we’re on a run-rate to $200 million in revenue, and we have 4,500 customers. We’re cash-flow positive for the past five quarters, and we’ve been shipping product for 16 consecutive quarters. We have about 450 employees in the company today and we expect to add another 350 in the coming 12 months.

So you have more than 4,500 customers. Can you name any? Security companies are often reticent to do that.

We have many we can name, several of which we’ve done seven-figure deals with. Some we announced today: Qualcomm, eBay, Verisign, Cricket, the Los Angeles Community College district. Others we’ve named before include SanDisk and Constellation Energy.

And what prompted you to hire Mark McLaughlin from Verisign? Was it him or was it his experience at Verisign that got you interested?

What we were really focused on was leadership capability, what Jim Collins would call a Level 5 leader and the raw IQ, intensity and discipline. We’ve known Mark for several years, he’s an exceptional leader and one of the best leaders I personally know.

How did the search go down?

We had a search under way for eight months. It’s taken that long because this is a one-in-a-decade company. It’s one of the fastest growing companies in enterprise IT. We were deliberate and focused on really finding the right person, who would be a good cultural fit with the team. We hired Russell Reynolds to help us with the search. We reviewed more than 150 people in detail, and interviewed more than two dozen people. There were many senior executives at public companies who were interested in this position.

Every security company tries to solve a particular problem, and my understanding is that Palo Alto Networks can detect traffic coming from certain applications. So when I’m signed into Facebook or Tweetdeck or Skype on a network where your gear is in use, you can detect it and watch out for good and evil traffic on those applications, and block the bad traffic. Is that right?

Exactly. That’s one of the three basic innovations that are our bread and butter. The one you just described is really our headline feature. We can uniquely identify applications and users as they pass through the firewall and the network. The second is around malware. We can scan for malware at very high speeds, which is also something that hasn’t been done before. Finally, we collapse multiple network functions that are usually done on individual appliances into one large system but without a degradation of performance. We do Web filtering and intrusion detection, which are traditionally done on separate network appliances. Network administrators are struggling with appliance fatigue. We are giving them the ability to roll all those things into a single appliance with no degradation of performance.

So, since everyone is going to start asking: When are you going public? Are you going to be hiring bankers soon?

We haven’t set a date for any of that yet. The focus is really to build and grow the company to the next level. Going public is just another milestone. We want to be the biggest independent network security company in the industry.

AT&T became the latest to join the fray on Tuesday, introducing a new $50-per-month plan that covers unlimited talk, text and Web for prepaid phones using its GoPhone service. There is a catch, however. Unlimited Web is only available on feature phones, not on the kinds of smartphones that can really start sucking down data.

The move is designed to help AT&T better compete in the prepaid market, which features low-cost plans from Sprint’s Boost Mobile and Virgin Mobile brands, as well as from smaller players such as Leap’s Cricket and Metro PCS.

With prepaid plans, phone buyers pay full price for their device, but with that they get the luxury of not having to sign a contract. And while prepaid plans once cost far more than traditional ones, such services are now often the cheapest game in town.

Boost Mobile, for example, offers plans that start at $50 a month ($60 for BlackBerry devices), with the additional perk of a $5 drop in price for every six months that a user pays on time — up to a maximum savings of $15 a month.

Metro PCS, meanwhile, offers a $60-a-month unlimited plan that is available in conjunction with an Android smartphone, the Samsung Galaxy Indulge.

Speaking at the CTIA 2011 show in Orlando, Lightsquared CEO Sanjiv Ahuja said that the two companies will begin trials of the service in the first quarter of next year and that more details of the deal will be made public soon.

Earlier this week, Lightsquared announced a roaming deal with Leap Wireless that will allow customers of that company’s Cricket service to eventually roam onto Lightsquared’s LTE network.

Although innovative, the notion of building out a network and acting as a wholesale provider has proved troublesome in the past. Most recently, Clearwire has struggled with the cost of building and operating its WiMax-based 4G network.

Ahuja drew a distinction, though, noting that while Clearwire also sells service direct to consumers, Lightsquared is pursuing a wholesale-only approach.

“We will never compete with our customers for end users,” he promised.

Among the company’s potential partners, he said, are retailers, other wireless providers and even laptop makers looking to have a more ongoing connection with their customers.

In a speech big on vision and short on details, Ahuja talked about the vast potential of his company to revolutionize the wireless industry and ease the looming spectrum crunch. He also pledged that the company will spend $14 billion in network infrastructure and operations costs over the next 8 years as it builds and operates its network.

“Ladies and gentleman, stay tuned,” Ahuja said. “In the coming days months and weeks you will be hearing a lot more from us.”

However, even with the masses descending upon Las Vegas this week, Cricket has decided to delay the Muve music service and the launch of its first Muve-compatible phone.

Cricket had hoped to launch service in Las Vegas this week along with a number of other markets later this month.

Under its revised time frame, Cricket plans to launch the service in Las Vegas later this month, add nine more cities in February and roll it out to the rest of its markets this spring.

Although all the necessary licensing is in place, Cricket spokesman Greg Lund said that the company needed the extra time to ensure all of the software bugs were ironed out before it started asking customers to pay for the service.

“It’s got to be just perfect,” Lund told Mobilized in an interview at CES in Las Vegas.

The company, best known for its prepaid phones, is offering a new service called Muve Music, which includes the cost of unlimited music downloads as part of a $55 monthly cellphone plan that also includes unlimited talk, text and Web. Basically, Muve adds about $10 to the cost of the monthly cellphone tab (which, incidentally, is about what one can expect to pay for the typical subscription music service).

The music is downloaded directly to the cellphone and is accessible as long as you remain a subscriber. From a technology standpoint, the service works by transferring the music to a secure partition of a 4GB digital memory card in the phone; Cricket says that partition can hold about 3,000 songs.

Cricket is launching the service next month with a single compatible phone–a color touchscreen feature phone known as the Samsung Suede, which will sell for $199. The service will first be available Jan. 6 in Las Vegas, with about 10 of Cricket’s other markets due to come on board later in the month.

What makes the service interesting is the approach–there is no tie to a PC whatsoever. Music comes to the phone, lives on the phone and is managed on the phone. In an interview, Cricket Vice President Jeff Toig said the service is geared to Cricket’s base of customers, many of whom don’t have a PC and broadband connection. It also allows them to get their music the way they do their other cellphone services–by paying in cash at the company’s retail outlets, thereby eliminating the need for a credit card.

The downside, of course, is that the music can only be played on the phone, though the phone can connect to a car stereo or external speakers over bluetooth or via a 3.5mm cable.

On the plus side, Muve doesn’t add much to the cost of a cellphone plan and eliminates some of the complexity traditionally associated with digital music. In addition to the ability to download and play tracks from all four major music labels, Muve subscribers can set any track to be either a ringtone or ringback tone (the music heard by callers while they are waiting for someone to answer).

Nokia tried a somewhat similar approach with its “Comes With Music” phones, which debuted in 2008. In that program, the cost of the music subscription was included in the price of the phone rather than in the monthly cellphone bill. Others, such as SpiralFrog, have tried to create services relying on advertising to subsidize the cost of providing music free to the end user.

Toig said that his customer base is one that typically isn’t downloading music from iTunes at 99 cents a pop, but includes a fair number of people that illegally download music from file sharing services.

The new service, he said, allows them to have a better experience without having to spend much more than they already are, while giving the record industry a chance to reach digital music customers they are largely missing out on today.

Unlike other services, which Toig said bank on the fact that people have access to a computer, Muve tries to make it easy to discover and download music directly from the phone. Customers can subscribe to curated feeds of music that get automatically updated, as well as find and download albums by name. A built-in social network allows them to see what their friends are listening to (assuming they also have a Muve-compatible phone).

“Nobody has done mobile music right,” Toig said.

Cricket won’t say how much of the incremental $10 in monthly revenue it is getting goes to the labels, but Toig said part of the bet is that Cricket will be able to reach customers that it otherwise could not.

“We’re obviously not doing this for a few percent,” he said. “We think this has appeal beyond our base to segments Cricket has not appealed to before.”

The acquisition is a savvy one for Yahoo (YHOO), which already has a strong sports content business and stands to benefit from the additional social networking and mobile integration that Citizen Sports offers.

Below, the official announcement:

Yahoo! to Acquire Citizen Sports

Strengthens Social Strategy by Combining the Power of the No. 1 Online Sports Destination with the Web’s Most Popular Social Sports Company

SUNNYVALE, Calif., Mar 17, 2010 –As part of its ongoing commitment to be the center of people’s online lives, Yahoo Inc. (NASDAQ:YHOO) today announced it has signed a definitive agreement to acquire Citizen Sports (http://www.citizensports.com), a company that brings the world of sports to fans’ favorite social networking sites and mobile devices through innovative applications. This acquisition will strengthen Yahoo!‘s social strategy of enriching, aggregating and distributing social content from across the entire Web, and offering a highly customizable social experience.

“Yahoo! is in a unique position to combine our deep expertise in content and aggregation technology to offer a highly personalized social experience,” said Bryan Lamkin, senior vice president, Consumer Products Group, Yahoo!. “Sports has been among the earliest online categories to experience rapid social proliferation, and the combination of Citizen Sports leading products with our world-class sports experience on Yahoo! Sports is a win-win for sports fans globally.”

Millions of people across the globe use Citizen Sports’ array of social and mobile products to play fantasy sports, fill out brackets, check live scores and read up-to-the minute news on sports including football, hockey, soccer, baseball, racing, rugby, hockey and cricket. Yahoo! Sports’ content will be integrated into these products, creating a seamless experience for sports fans wherever they are. On Yahoo! Sports, users will be able to broadcast their allegiances, create or join a conversation with friends and fans and cheer for their teams through Citizen Sports’ applications. This integration will further transform Yahoo! into a more personally relevant experience, drive deeper user engagement and create opportunities for advertisers to interact with audiences in new environments.

As the #1 destination for online Sports with more than 39 million monthly unique users in the U.S.*, Yahoo! Sports provides people with the most timely, relevant and comprehensive sports news, information and programming. Citizen Sports’ network of popular applications for Facebook, MySpace (NYSE: NWS), hi5, iPhone and Android span professional, college and high school sports.

“Citizen Sports was founded with the intent to enable fans to access news, scores and fantasy games on the platform of their choice,” said Mike Kerns, founder and CEO of Citizen Sports. “We look forward to becoming a part of Yahoo! and bringing our social experiences to their 600 million users around the globe.”

Citizen Sports was founded by Mike Kerns and Jeff Ma in 2004. Since then the company has brought together millions of sports fans from around the world to enjoy sports and connect with their friends. Citizen Sports is based in San Francisco.

Yahoo! expects to complete this acquisition in the second quarter of 2010. Financial terms were not disclosed.

IPL, which has quickly become one of the most popular forms of one of the world’s most popular sports, has new wrinkle this year. Google’s (GOOG) YouTube unit has purchased the world wide Internet rights to the event and plans to use them in a way that many sports fans wish NBC uses its rights to the Olympics. NBC ultimately put footage of all Olympic events on its Web site, but in many prominent cases it did not carry live footage online in an attempt to maximize its audience for prime time television.

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