That compares to an operating loss of $255 million in the year-ago quarter on a roughly similar revenue base. The company reported a net loss of $643 million, or 21 cents per share, compared to a net loss of $863 million, or 29 cents per share in the first quarter of 2012.

The No. 3 U.S. carrier said that 86 percent of Sprint-branded phone sales were smartphones, and said it tallied more than five million smartphone sales, including 1.5 million iPhones during the quarter.

“This is a transformative year for Sprint, and we’ve gotten off to a good start,” Sprint CEO Dan Hesse said in a statement.

Sprint, which announced its plans to sell a majority stake to SoftBank, has said it will evaluate the recent offer from Dish, while SoftBank says it still hopes to complete the Sprint deal by July.

Update: In a conference call with investors, Hesse noted that the pending and potential deals make this an exciting time, but added, “We haven’t taken our eye off of operations.”

The company remains on track to shut down its Nextel network by June 30, with plans to start deploying LTE service on that 800MHz spectrum by the fourth quarter.

Hesse said that the company remains on track to close its pending SoftBank and Clearwire deals by July, but added that the company won’t be discussing those efforts on the call.

In a regulatory filing with the commission, Sprint confirmed the meeting as well as details of its pitch for approval of the deal.

SoftBank has proposed acquiring a controlling interest in Sprint as well as enabling Sprint to acquire the rest of Clearwire — a move supported by Clearwire’s board but opposed by some Clearwire shareholders.

Clearwire CEO Erik Prusch also attended the March 14 meeting with FCC Chairman Julius Genachowski and other members of the commission.

The company is willing to pump more than $20 billion into Sprint, with more than $12 billion going to shareholders and $8 billion funneled into improving Sprint’s network.

During the meeting, Son explained what he had done in creating one of Japan’s largest wireless providers after entering as an upstart in 2006 by purchasing Vodafone’s Japanese wireless interests.

“Through innovative products, pricing, and marketing, SoftBank is now poised to become the second largest wireless provider in Japan,” Sprint said in the filing. “Mr. Son explained that through SoftBank’s investment in Sprint, he hopes to bring a similar competitive spark to the U.S. wireless marketplace.”

Sprint CEO Dan Hesse says the Clearwire deal (which Dish is trying to thwart) is simply a starting point. To ensure that it remains competitive in the years ahead, the company must seek even more spectrum.

“Clearwire would give us a strong spectrum position for a period of time,” Hesse told Bloomberg. “But we also have a very long-term view, and we would want to acquire more spectrum.”

Now that Sprint has tarted up its formerly weak balance sheet with an $8 billion cash infusion from Japan’s SoftBank — currently under regulatory review — the company is actually capable of executing Hesse’s plan, which it must if it hopes to make a stand against its rivals. With consumer demand for wireless data spiking, carriers are moving to increase their network capacity. And spectrum licenses are becoming increasingly difficult to find. Better to acquire additional spectrum now, than rather than scramble to make up lost ground later.

With 20/20 hindsight, the Nextel merger was a mistake. The synergies, if you will, that we had hoped for and planned for didn’t materialize.

– Sprint’s Dan Hesse to GigaOM’s Kevin Fitchard, on his fifth anniversary as CEO

Sprint Chief Executive Dan Hesse said the deal includes several important Midwest markets such as Chicago and St. Louis. The transaction involves 585,000 U.S. Cellular customers in Illinois, Indiana, Missouri and Ohio.

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Reporting third-quarter earnings Thursday morning, Sprint said it lost $767 million, or 26 cents a share, compared with a loss of $301 million, or 10 cents a share, a year earlier. While that’s better than the deeper loss of 42 cents a share analysts had forecast, it’s ugly just the same. Net operating revenue for the period was $8.76 billion, an improvement over the $8.33 billion Sprint managed during the third quarter last year. Analysts had been looking for revenue of around $8.8 billion.

And Sprint continues to lose subscribers. The carrier today said it suffered a net customer decline of 456,000 in the third quarter. That’s worse than the loss of 361,000 analysts had expected, and far worse than the loss of 246,000 customers it posted in the year-earlier period. That said, Sprint did add 410,000 net postpaid customers in the quarter. So a bit of good news there.

The company sold 1.5 million iPhones during the quarter. That’s nowhere near the 4.7 million sold by AT&T and 3.1 million sold by Verizon during their third quarters. But, according to Sprint CEO Dan Hesse, it’s enough to keep the carrier on track to satisfy its $15.5 billion purchase agreement with Apple.

At $5.59, Sprint shares are down .62 percent in early trading.

The deal includes $12.1 billion to be paid to Sprint shareholders, and $8 billion in new capital for the carrier. Both companies’ boards have approved the deal, SoftBank said in a press release.

Sprint had said Sunday that news was coming, after confirming the talks last week.

The deal is the second recent major transaction in the U.S. cellular industry, after T-Mobile USA struck a deal earlier this month to acquire MetroPCS in a stock and cash deal.

A Webcast is just getting under way. AllThingsD will have live coverage.

1:11 am: SoftBank CEO Masayoshi Son is speaking, talking about where Sprint is today.

1:13 am: With the deal, SoftBank will have 96 million customers in U.S. and Japan, bringing the company closer to the size of AT&T and Verizon, though it will still have far fewer customers than the two U.S. leaders.

1:18 am: SoftBank won’t be using stock for the deal, meaning no dilution for existing SoftBank shareholders, Son said.

The deal values Sprint at $7.30 a share, with current shareholders able to receive either cash or one share in the new company.

There is a $600 million breakup fee due the other party if Sprint accepts a better offer or if SoftBank doesn’t get the financing needed to complete the deal.

1:21 am: Sprint would have to pay up to $75 million in SoftBank’s expenses if its shareholders vote down the deal.

1:22 am: The deal is expected to close in mid-2013, SoftBank said.

1:22 am: Son talked about the U.S. as a growing market far larger than the Japanese market.

“The smartphone is becoming the core of mobile communication,” Son said, noting that the U.S. is a leader in the field.

U.S. customers also pay one of the highest average monthly bills in the world, just ahead of Japan.

While the U.S. has fast LTE networks, the average speeds customers are getting are actually lower in the U.S., compared with Japan, Italy and the United Kingdom.

1:25 am: The U.S. market is a duopoly, though, Son notes. For a challenger like Sprint, there is a compelling market opportunity, he said.

1:26 am: Sprint CEO Daniel Hesse now speaking.

1:27 am: Hesse notes that 70 percent of U.S. customers are prepaid, but those customers represent 90 percent of the industry’s revenue.

Sprint is distant No. 3, but fastest-growing in revenue and average revenue per users, Hesse said.

“It wasn’t always this good,” Hesse said, noting that the company was in free-fall when he took over.

“Our brand was ranked last,” Hesse said, and the company was losing one million net customers per quarter.

1:30 am: By the way, Hesse will be CEO of Sprint after the SoftBank deal, and headquarters will remain in Overland Park, Kan.

Hesse is still recapping how bad things were when he took over. He said that the company looked at all the reasons why customer service was so bad.

Every single Monday morning, Hesse said, he went over all the complaints from the prior week, and held the department heads accountable for the issues.

Sprint was last among carriers in customer service from 2007 to 2009 and is now first, Hesse said. (Here’s a story we did on the topic during a visit to Sprint HQ earlier this year.)

1:36 am: Hesse notes that the company is also posting double-digit percentage customer gains — the only major U.S. carrier doing so.

1:38 am: Hesse is now talking about how the company has cut costs. He’s making the point that the company was spending twice as much on customer care when its service was the worst. Overall general and administrative expenses have been cut in half.

Improving quality allowed the company to close 29 support call centers.

“We’re answering the phone much faster than when we had 29 more call centers,” Hesse said.

1:39 am: Did I mention it is 1:39 in the morning? #tired

1:41 am: Anyway, Hesse is talking about the benefits of shutting down Nextel’s old network.

Not sure if Hesse’s speech is new to the Japanese audience, but those who have followed Sprint for some time haven’t learned anything new.

1:42 am: Hesse said that the SoftBank deal will help the company grow as it continues in its network revamp effort, which should start being a financial benefit around 2014.

The partnership with SoftBank “gives the company opportunities internally and externally that it hasn’t had in the last few years,” Hesse said.

“This is pro-competitive and pro-consumer,” Hesse said, because it creates a stronger No. 3 player.

Of all the possible transactions, Hesse said, this was the best one for its shareholders, as well.

1:45 am: Hesse wraps up his remarks.

Masayoshi Son now back talking about Sprint’s recent performance.

Son also notes that Sprint’s share price hit a bottom around the time the iPhone 4S was launched, and has been growing since.

SoftBank had a few key questions, including, most importantly, whether the deal would pay off.

Son says Sprint was already making progress on its turnaround. On top of that, Son notes that SoftBank will add capital and insight.

There are also synergies when it comes to purchasing devices and building LTE networks.

Son notes that SoftBank showed its turnaround capabilities in the way it improved its fixed-line business, as well as its acquisition of Vodafone KK.

SoftBank also turned around Willcom, Son said. One turnaround might be a coincidence, but doing it three times shows SoftBank has an ability to help companies.

1:56 am: The combined company will have increased purchasing power from both phone makers and network gear providers, Son said.

2:11 am: Had some technical problems there, but back now. Talk has been centered on the impact of debt for both SoftBank and Sprint.

2:13 am: With interest rates so low, now is the time to buy companies, Son said.

Son wraps up, noting that the deal will also result in better products and services for customers.

2:15 am: At long last, on to Q&A.

First question is whether the deal will improve connectivity for customers.

Son notes improvements SoftBank is making in Japan that will help. The company now has the “platinum band” spectrum it needs, as well as the money it needs to take advantage of it.

2:21 am: Next question asks what SoftBank’s long-term plan is — to be No. 1 in U.S., to be No. 1 globally?

Son: With this transaction, SoftBank’s revenue will be No. 3 globally. Son says that, as a person, he always wants to be No. 1, but everything has steps, and this is the first step.

“I’d like to make this partnership a big success first,” Son said.

2:24 am: Asked when the company began thinking about a deal, Son said it had been looking at Sprint specifically for only a few months.

However, Son said that the company had been eyeing deals beyond Japan since acquisition of Vodafone KK several years ago. “The time has come, I believe,” Son said.

2:26 am: What about MetroPCS or Clearwire?

“I cannot rule out any possibilities,” Son said. “Anything can happen.”

Maybe the company will buy Japanese rival DoCoMo, Son noted. He doesn’t want to speculate on any further acquisitions.

Hesse notes that Sprint is a large investor in Clearwire, but nothing in SoftBank deal requires Sprint to make a further deal with Clearwire or any other company.

2:31 am: As for how Sprint will use the money from SoftBank, Hesse said there are a variety of options, and the company will look at external and internal expansion opportunities and make those decisions at a later date.

2:33 am: Son is asked how the company will share its know-how with Sprint and vice versa.

Hesse will remain as CEO, Son said, but added that he is committed to helping Sprint.

“I aspire to be No. 1, and I want to be No. 1, eventually,” Son said, adding that his goal remains to be larger than rival DoCoMo.

2:38 am: The Wall Street Journal’s Daisuke Wakabayashi asks Hesse and Son why the deal is structured the way it is, rather than as a full takeover.

As for the deal structure, Son said there were a lot of other possibilities considered.

The format SoftBank chose ensures that the company will get exactly a 70 percent stake, as opposed to the uncertainty of a more traditional tender offer.

By not doing a full takeover, Sprint will remain a U.S. public company, which will improve its access to capital, Son noted.

“I think the deal we announced is more transparent,” Son said.

Hesse said the $8 billion infusion into the company makes the new Sprint a “much, much stronger company,” with a similar balance sheet to AT&T and Verizon.

If all investors opt for maximum cash, they would get 55 percent in cash and 45 percent in stock.

2:46 am: Is there an opportunity for more consolidation?

Hesse reiterated that he sees more consolidation ahead in the U.S. market, and said the deal gives Sprint an opportunity to take part in that.

Hesse said that deals that don’t involve AT&T and Verizon are good for the industry, and good for consumers.

2:51 am: Does the Sprint deal signify that SoftBank is changing focus from being an Asian Internet company to being a global telecommunications company?

I will not slack on efforts to be No. 1 in Asia as an Internet company, Son said.

However, Son notes that the U.S. is a key market, and a leader in things such as LTE.

“I want to be part of that evolution in the United States,” Son said.

2:55 am: So, did Sprint or SoftBank do the approaching?

“Always I am the proposer,” Son said.

2:58 am: Hesse said Son approached Sprint some months ago. “Our board considered a number of possible strategic alternatives — partners and options,” Hesse said, and determined that this was the best.

2:59 am: And, with that, the press conference wraps up.

Even though the company has had to spend billions to get that privilege — more than $15 billion in commitments over four years — the company couldn’t afford not to have the devices its customers want.

“You really don’t want to be on the outside,” Hesse said, adding that the company had a lot of longtime customers who stuck with Sprint on the assumption that the company would eventually get the iPhone.

Speaking to a group of reporters touring Sprint’s Kansas headquarters, Hesse said the key was just a willingness on Apple’s part. After years of wanting the iPhone, Sprint’s chance came in a phone call from Apple last year.

“I think the No. 1 thing was getting the call from Apple that they were interested in at least having the opportunity,” Hesse said. Of course, the company and its board had to take a hard look at the economics.

Selling the iPhone is good for the long term, Hesse said, noting that customers are more valuable in the long term. But, in the short term, it is costly, as the company spends more in subsidies to attract those iPhone buyers.

Making that investment was extra hard, as the company also had to invest at the same time as it worked to revamp its network.

“We committed to $15.5 billion over four years in purchases,” Hesse said. “That’s a large commitment.”

He said Sprint looked at Apple and its popularity, and “we saw no reason to bet against Apple.”

The other bet that Hesse said made sense was the company’s move to WiMax, even if it did turn out to be the Betamax of 4G technologies. Hesse said that the company had only two choices — be first with WiMax or last among the majors with LTE. That’s because Sprint didn’t have enough free spectrum to launch LTE when Verizon did.

“Today, looking back, I think it was the right decision,” Hesse said.

As for whether Sprint would like to see an iPad in its lineup, Hesse has clearly learned the right Apple answer.

“I can’t comment on that,” he said.

There are still plenty of areas where Sprint trails its competitors, he said. But things are getting better every quarter.

“What you are not going to see around here are any ‘mission accomplished’ signs,” Hesse told a group of journalists — including AllThingsD — who have been touring the company’s Kansas headquarters over the past two days. “We are on a long-term turnaround plan.”

One of the big areas of improvement has been in customer service. A couple years ago, the company was ranked one of the worst in the industry and, at the same time, Sprint was spending twice as much as it does today, because it was dealing with more support calls and issuing bill credits to dissatisfied customers.

“Great customer service costs less,” Hesse said. “When we were last in the industry, we were spending twice as much.”

By cutting down on the reasons for customers to call in, Sprint has been able to close 29 call centers and yet still answer calls faster, Hesse said. Last quarter, the company had its fewest-ever calls from customers, and issued the smallest amount in bill credits.

Sprint is also finally gaining more customers from rivals than it is seeing defect to other carriers. After the company’s history of more net defections, more customers are now bringing their phone line to Sprint than are porting their number out — a metric that has now been positive for eight straight quarters.

That has been particularly important now that nearly everyone has a cellphone, meaning the battle is increasingly about winning over existing customers.

“It will be very important to do very well in the switching market,” Hesse said.

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.”

Not at all.

“We’re very happy with it,” Hesse said of Sprint’s deal with Apple, during the company’s annual shareholders meeting Tuesday. “Carrying the iPhone will be quite profitable.”

But not for a few years, at least.

By its own admission, Sprint won’t profit from the device until 2015. But according to Hesse, who was reelected to Sprint’s board during Tuesday’s proceedings, that initial heavy upfront investment in the iPhone is worthwhile because it will slow subscriber turnover and create a new segment of higher-value subscribers.

“We believe in the long term,” Hesse said. “And over time we will make more money on iPhone customers than we will on other customers.”

And there, it would seem, Hesse does have a point. Sprint sold 1.5 million iPhones in its first quarter, with about 44 percent of them going to new customers. And those sales helped spike Sprint’s average revenue per user 6.9 percent, the largest year-over-year increase ever charted in that metric in the U.S.

After all, their ads flood TV screens, their billboards dot the highways and it often seems there is a store at every strip mall.

But it’s harder to hear all four carriers at once. Such a gathering was expected at last year’s CTIA show, but T-Mobile’s CEO pulled out after AT&T announced its proposed deal on the eve of the show. The three remaining CEOs did share a stage in a panel moderated by CNBC’s Jim Cramer.

This year, though, top executives from all four are slated to face off in an afternoon keynote again moderated by Cramer.

AllThingsD will have live coverage starting in just a few minutes, at 4:30 Central Time (2:30 pm PT).

Earlier:
4:38 pm: CTIA chief Steve Largent is onstage, introducing the four chiefs.

4:39 pm: Dan Mead is onstage now, talking on his own. Checking into what is going on…

Of course, left to his own devices, the Verizon Wireless CEO is talking about the spectrum crunch. If preaching to the choir were illegal, most of the folks at CTIA would be in jail by now.

I thought this was supposed to be a roundtable. But we are getting a stump speech. I hope there won’t be four of these, but starting to fear the worst.

4:44 pm: Okay, I’m told that there will be a roundtable, but first we have to sit through four speeches.

4:45 pm: Mead is advocating for Verizon’s pending deal to acquire spectrum from the cable companies.

We’re confident regulators will understand this purchase is good for Verizon Wireless customers and the entire broadband economy, Mead said.

Mead touts Verizon’s recent offer to sell off some other spectrum if regulators give the cable deal the okay.

4:47 pm: All right, Mead’s done. Next up: Sprint CEO Dan Hesse.

Hesse is talking LTE, or as he calls it “Lots to Explain.” Many customers don’t know what 4G is and Hesse says the industry has itself to blame.

He notes that even the oil industry gets higher satisfaction ratings than cellular carriers do.

4:52 pm: Hesse takes aim at well-liked tech companies like Apple and Amazon.

“They are called over-the-top players because … they ride over the top of our enormous capital investments.”

4:54 pm: Next up in Hesse’s speech is talk about trust and privacy. There’s a lot of talk, Hesse said, but “it’s difficult to separate myth and reality.”

A lot of politicking and shrill talk from interest groups, Hesse said. “For most consumers, it is just too complicated.”

Sprint promises it will offer independent audits and other moves so customers don’t have to offer “blind trust.”

Now he’s touting the Sprint Guardian services that it introduced earlier today.

5:00 pm: Hesse promises a new mobile advertising program coming soon, giving consumers control and options.

Hesse said Sprint will enlist an outside firm to verify the company is delivering what it says, like financial auditors do for the books.

Hesse said the industry can also work together in some of these areas. “Collectively we need to build trust,” he said.

5:03 pm: Hesse wraps up, ceding to T-Mobile CEO Philipp Humm.

5:05 pm: T-Mobile is back, Humm begins, echoing the refrain he has been repeating since the Consumer Electronics Show in January.

Humm offers a subtle take on data and congestion — “Intelligent unlimited rate plans are the future,” Humm said. One can assume that by intelligent, he means plans like T-Mobile’s that throttle users once they hit a certain data cap.

5:07 pm: Yep. Now he’s touting T-Mobile’s take on data plans, offering unlimited with no overages but limits on how much 4G data they can consume.

Humm promises more of the same to come.

“That won’t be enough,” he said, noting that T-Mobile and others need innovative technology and additional spectrum.

In the U.S. the spectrum problem is particularly acute.

Humm touts what T-Mobile is doing to make the best use of the spectrum it has. Will be interesting to see if he jabs back at Verizon, which T-Mo has accused of warehousing excess spectrum.

So far, he’s just talking about other technologies like Wi-Fi offload and off-peak delivery.

5:11 pm: “We had nine tough months under the pending AT&T deal, as you can imagine.”

The company releases first quarter earnings on Thursday, so Humm isn’t saying much about where things are at right now.

5:13 pm: T-Mobile tripling business salesforce as the company attempts to evolve into a serious business-to-business player.

Humm said T-Mobile wants to be known for more than just low prices.

5:15 pm: T-Mobile is back going after AT&T and the iPhone. New ad shows Carly on a motorcycle speeding past the AT&T iPhone.

OK, last of the stump speeches as AT&T Mobility unit President Ralph de la Vega takes the stage.

5:17 pm: De la Vega touts a PC World study that found AT&T’s LTE network to be the fastest (Verizon touts a separate one that found its network fastest).

5:18 pm: De la Vega now pitching the home security service it introduced on Monday.

I never thought I’d say these words: “I can’t wait for Jim Cramer.”

5:32 pm: De la Vega wrapping up, leaving just under a third of the 90 minutes for the roundtable.

5:33 pm: Boo-yah. Here’s Cramer.

5:35 pm: Cramer starts by giving each company one minute to answer a few questions. Biggest innovation since last year.

De la Vega: A year ago there were more PCs than smartphones and tablets. Now that’s changed. “The Internet is going mobile.”

Hesse: The fact that T-Mobile’s Humm is onstage. “He was tied up with a gag a year ago.”

Mead: Video delivery over mobile devices.

5:37 pm: Next question: What are we going to have a year from now that we don’t know about now.

Mead: I think you are going to see a lot more activity of consumers exploring what they can do on LTE.

Humm: Evolution from access provider to service providers. Voice and text will decrease in importance.

Hesse: Privacy, safety and security will replace speed and technology as the main point of discussion.

De la Vega: Mobile payments. “It’s time for the smartphone to replace the wallet.” Partnerships are coming together.

5:44 pm: Cramer challenges Mead on whether Verizon has too much spectrum.

“We don’t have the most spectrum,” he said. “We have the most effective use of spectrum.”

5:47 pm: Hesse expands on challenges facing wireless carriers. “Our Achilles’ heel is trust and reputation,” Hesse said, calling it a “crisis.”

There is an opportunity to sell more to consumers if the industry can turn things around. “If they trust us they are going to buy from us.”

Cramer asks about T-Mobile’s new ad touting its network as being faster than AT&T’s iPhone.

“It ain’t true,” de la Vega. “That’s why this industry has a bad rap because we take the truth and we stretch it.”

Humm clarifies that the ad is pointing out that the iPhone is slower, not AT&T’s LTE network, which is faster.

5:55 pm: Cramer asks Humm if without an iPhone to sell, isn’t T-Mobile forced to just race to the bottom on price?

“Pure price competition would be the wrong way to go,” Humm said, saying that it needs to find different kinds of unlimited offerings.

5:56 pm: Asked about the impact of cellphones in uprisings across the globe, Hesse noted that phone ownership varies and so does the impact.

Very high in places like Egypt, but lower in Syria and very very low in North Korea, at 4 percent.

The privileged are the ones who have cellphones and they are not going to want to upset the applecart, Hesse said.

5:59 pm: Could T-Mobile USA go public? “I think it is the perfect audience here to make a big announcement,” Humm said, before, of course saying little.

Hesse won’t comment on whether Sprint is looking at any big deals, but notes the company is focused on its network transition. “A deal would have to be very compelling for us to do it at this time.”

6:01 pm: Cramer asks the panel if Facebook is a good thing for the industry. All agree that it is, but Mead won’t comment on whether it should be worth more than Verizon.

6:02 pm: Is Apple a friend, foe or both?

Friend, said de la Vega.

Skype?

“I don’t see Skype as a threat,” Hesse said. “To us, a bit is a bit.”

Amazon?

Amazon is a friend, said Humm. “Our industry lives on coopetition.”

Google?

Mead: “A lot of people in this room are customers and suppliers and competitors. That’s the nature of our industry.”

Google is a friend and Mead thinks Google would say the same of Verizon. “We helped put Android on the map.”

6:07 pm: And … we’re out.

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That’s the word from Sprint CEO Dan Hesse, who tells CNET that the carrier’s unlimited data plan has been far too much of a boon to its business to consider doing anything otherwise.

“I’m not anticipating the unlimited plan would change by that point,” Hesse said. “That’s our distinctive differentiator. Frankly, [the iPhone and unlimited data is] a marriage made in heaven.”

And that does appear to be true — to a point. Reporting first-quarter earnings today, Sprint said that 44 percent of iPhone sales during the period were to customers new to the carrier. “A huge percentage of our gross adds are iPhones, even though it’s a 3G device and it’s competing head to head with 4G devices,” Hesse said during Sprint’s earnings call.

Of course the next iteration of the iPhone is almost certain to be LTE-capable. So Sprint best get on the stick with its 4G network deployment, because its LTE network needs a lot of work. An iPhone with unlimited LTE data sounds great. Question is, can Sprint deliver that experience by the time the device launches?

As part of its fourth-quarter earnings report, Sprint disclosed on Wednesday that it sold 1.8 million iPhones during its first quarter carrying the Apple smartphone.

Of those, 40 percent of the sales were to new customers, Sprint said in a slide prepared for its earnings conference call.

Sprint highlighted a range of devices, but I’ve circled the one that I think had the biggest impact.

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 move also will result in four top executives leaving the company, according to a memo from CEO Dan Hesse.

“As the wireless market has evolved, the lines between consumers and businesses have blurred,” Hesse said in the memo, which was first reported by Reuters. “Because of the enormous investments we’re making this year in Network Vision and in the iPhone, we need to consistently be looking for ways to be more efficient.”

Leaving the company are divisional presidents Bob Johnson and Danny Bowman and senior VPs Chris Rogers and John Carney.

All sales will now report to Paget Alves, with all consumer and business marketing being headed by Bill Malloy. Sprint’s machine-to-machine business will switch over to wholesale unit president Matt Carter.

A Sprint representative confirmed the moves and the authenticity of the memo.

Although Sprint got its way in seeing AT&T’s efforts to buy T-Mobile derailed, the company faces plenty of hurdles of its own, and remains a distant No. 3 to AT&T and Verizon Wireless.

The company had placed a big bet on being first to market with a high-speed 4G network, choosing WiMax. However, with LTE offering higher speeds and more ubiquitous adoption, the carrier is now shifting gears and aiming to build an LTE network, as well.

Sprint said this week that it will launch by midyear in several southern U.S. cities, but it now trails both AT&T and Verizon in the LTE race.

Also, as paidContent’s Tom Krazit notes, the Sprint Web site could do with a bit of business/consumer consolidation, too. The screenshot below is what folks see when going to Sprint.com:

Updated at 1:40 pm PT to include confirmation of the moves by a Sprint representative.

“For those that want to abuse it, we can knock them off,” Hesse said, according to a Dow Jones Newswires report. The report also said the carrier was slowing the speeds of about 1 percent of its most data-hungry customers.

However, in a blog post on Friday, the carrier insisted that it is not slowing down the speeds of any of its customers on traditional postpaid contract plans.

“Reports that Sprint throttles the top one percent of data users are false,” Sprint said in the post. “At yesterday’s investor conference, Sprint CEO Dan Hesse was referring to Sprint’s right to terminate service of data abusers who violate Sprint’s terms and conditions.”

Hesse’s comments raised a lot of eyebrows given that Sprint has spent a fortune on ads reminding Americans that it is not charging overages like AT&T or Verizon Wireless, nor is it slowing the speeds of those who use a lot of data, as does T-Mobile USA.

Sprint said it contacts customers doing things like using a ton of off-network data or tethering their devices, but says it reserves the right to terminate customers that don’t change that behavior. “Consistent with our advertising, engaging in such uses will not result in throttling for customers on unlimited data-included plans for phones.”

Also, as we’ve reported, the company is exploring using so-called throttling on its Virgin Mobile prepaid brand.

Sprint CEO Dan Hesse

Shares of Sprint are rallying by about 6 percent in after-hours trading, on word that AT&T has abandoned its $39 billion bid for T-Mobile.

That’s really only a jump of 13 cents per share — a figure that says a lot about the pickle in which Sprint remains, despite the fact that its arguments against the AT&T-T-Mobile combination have prevailed.

Sprint no longer has to deal with the threat of a merged AT&T-T-Mobile. But it still has to cope with the fact that it is a distant No. 3 to AT&T and Verizon Wireless. And, after betting on a different 4G technology, the company also has to bring up an entirely new network, all while trying to turn off its older Nextel network.

Still, there is some cause for celebration, an opportunity that Sprint did not let go to waste.

“From the beginning, Sprint has stood with consumers who spoke loudly and clearly that AT&T’s proposed takeover of T-Mobile would create an undeniable duopoly that would have resulted in higher prices, less innovation and fewer choices for the American consumer,” Sprint said today in a statement, in which it also praised federal regulators for their opposition to the deal.

Sprint and its CEO, Dan Hesse, had opposed the deal mightily before government regulators and Congress, and in the court of public opinion, investing a lot of political capital in the process.

That said, the deal’s failure doesn’t exactly help Sprint out of the messy spot it’s in.

For one thing, Sprint is still losing money. In its most recent quarter, it booked a $301 million loss on revenue of $8.3 billion, which was an improvement over the prior year’s period. On the bright side, it added 1.3 million customers — and that was before it had Apple’s iPhone in its stores to help entice new customers.

But while having the iPhone is nice, it’s not helping the bottom line. As The Wall Street Journal reported in October, Sprint has committed to buy more than 30 million iPhones, which will cost it as much as $20 billion over time, and on which it expects to lose money through at least 2014.

And that’s not even the half of it. Sprint also plans to spend big to build a new LTE network in 2012, and currently relies on WiMax as its 4G technology. With $5 billion in cash and short-term investments on its balance sheet as of the end of December, Hesse said, the company will have to go to the credit markets and borrow to get the build-out done.

Meanwhile, its relationship with the wireless broadband concern Clearwire isn’t exactly helping. Clearwire is the provider of Sprint’s 4G technology, and relies heavily on Sprint for its funding. By using Clearwire’s WiMax technology, Sprint was first to the market with 4G, something that gave it an early advantage over its rivals. But that the move also left Sprint alone as both AT&T and T-Mobile Verizon joined numerous carriers in Europe in moving to a rival 4G technology, known as Long-Term Evolution, or LTE.

Had Sprint not started the move to LTE, it likely would have faced an increasingly tough time getting device makers to bring out their latest and greatest devices for a WiMax standard that few other carriers were adopting.

So for Sprint, while one important battle is won, the war to turn the company around — and it will be a tough one — is far from over, and far from victory.

Update: Initially I identified T-Mobile as going launching an LTE network, which it’s not. I meant to say Verizon. Sorry about that.

AllThingsD’s Ina Fried contributed to this report.

“We stand for simplicity and value,” Hesse said, speaking Thursday at the company’s developer conference in Santa Clara, Calif. “It’s about simplifying the business in every way possible.”

Sprint has been making a number of changes. Although it continues to tout unlimited data plans for phones, the company has also added a surcharge for smartphones, curtailed its generous early upgrade program and, most recently, ended an unlimited data plan for its 4G mobile hotspots.

Hesse noted that customers want simplicity and that customers will pay for simplicity — in some cases even paying more for that convenience.

Hesse noted that Sprint’s stock has been under pressure. He said that stems from two big investments the company is making. One is on building its next-generation network; the other is by offering big subsidies on the iPhone.

“They are going to be a big cash drain,” he said, adding that both, however, are necessary.

“Having a great network is just table stakes to being a great wireless company,” Hesse said. “We are going to do what it takes.”

That said, the moves will come at a cost.

“We’re going to have to go to the markets and borrow money — we’ve said it,” Hesse said.

Hesse took the stage to a loud round of applause. “I can tell I am not at a shareholders’ meeting.”

Update: On the device side, Hesse declined to offer much in the way of roadmaps for the future, but said that Sprint plans to introduce LTE devices next year, as well as supporting all of the major phone operating systems. “We will continue to support Android, iOS, RIM and Windows,” he said.

Sprint’s current 4G technology uses WiMax, but the company has said it will start building an LTE network next year. Hesse said the plan is to have devices with WiMax and CDMA and those with LTE and CDMA, but not necessarily any that have both WiMax and LTE support.

Asked about the AT&T-T-Mobile merger, Hesse said, “basically it is in the courts. That’s all I can really say at this point.”

As for whether Sprint might buy assets if the merger does go through and AT&T is forced to divest certain assets: “I’m not going to speculate on what Sprint may or may not do,” he said.

During an earnings call Wednesday, Hesse claimed iPhones use about half the network resources required by Android handsets, a feature that weighed heavily in the carrier’s decision to add Apple’s device to its portfolio.

“There is a misperception that our launch of the iPhone will increase the load on Sprint’s 3G network and require us to spend more 3G capital,” Hesse said. “The reverse is true. iPhone users are expected to use significantly less 3G than the typical user of a dual-mode 3G, 4G device. Even adjusting for more total new customers being added to the network, we believe they will put less load on our 3G network than they would have if we did not carry the iPhone.”

In other words, Sprint believes the iPhone is so data efficient that it will help the company continue to offer unlimited data plans for its smartphones — even following the debut of iCloud, whose services are presumably on the data-heavy side. Evidently, Apple’s strict network efficiency requirements, which prohibit apps from pinging networks as often as those on other operating systems, and the iPhone’s ability to quickly offload data onto Wi-Fi goes a long way toward reducing network congestion.

So the iPhone will likely be a big boon for Sprint, though one that’s not without risks. The carrier says the device’s benefits won’t exceed its costs until 2015. And in the meantime it may need $7 billion in new financing to cover up-front and network costs related to it.

“Growth in Sprint brand net additions was achieved without the benefit of Apple’s iPhone 4S and iPhone 4, which launched Oct. 14,” Sprint said, adding that the iPhone should add to the company’s base and that “iPhone users are expected to be among Sprint’s most profitable customers.”

On the earnings front, Sprint reported a net loss of $301 million, or 10 cents per share, on revenue of $8.33 billion. That compares to a loss of $911 million, or 30 cents per share, on revenue of $8.15 billion in the year-ago quarter. The company also said it posted a positive $208 million in operating income, compared to a $213 million operating loss a year ago.

“We are adding to our customer base, our ARPU (average revenue per user) is increasing, and as a result our wireless revenues are growing,” CEO Dan Hesse said in a statement.

The company noted that it has expanded its credit line and changed some of its terms. Sprint also stressed that it has total liquidity of about $5 billion, including $4 billion in cash and investments. Its next debt maturity, some $2.3 billion worth, is slated for March.

At the fall CTIA show on Tuesday, the same executives were assembled, but things weren’t nearly as fun. First of all, there was no Mr. Boo-ya. More importantly, the executives appeared one after the other, rather than agreeing to again share a stage.

The result was more stump speeches than discourse.

Sprint CEO Dan Hesse, who is also the chairman of the CTIA, kicked things off with a talk largely focused on environmental issues, noting that the industry trade group plans later today to announce new guidelines for product reuse, recycling and packaging.

“We’re making real progress,” Hesse said. He also noted that it was cellphones that transmitted dramatic imagery from the Middle East as governments changed, and wireless phones that helped after natural disasters in the U.S. and around the globe.

Ralph de la Vega, CEO of AT&T Mobility, focused on some of the investments his company has made, including $80 million to open research “foundries” in Palo Alto, Calif.; Plano, Texas; and Israel.

The speeches weren’t totally devoid of zingers. Hesse did note that de la Vega looks a lot like Lincoln assassin John Wilkes Booth, who was also an actor. Speaking after Hesse, de la Vega noted the observation came from Hesse, “a guy who is the best actor in wireless we have today.”

De la Vega was followed by Verizon Wireless CEO Dan Mead.

Like de la Vega, Mead spoke about his company’s investment in facilities that help network equipment makers, operating system creators and app developers to collaborate. Verizon opened an application center in San Francisco earlier this year, following on the heels of an earlier 4G LTE center in Waltham, Mass.

Mead also spoke about the impact the industry has had on society in the decade since Sept. 11, 2001, when, he said, the wireless business established itself as a key aid to first responders in the aftermath of crises.

“Since that time, we’ve responded to hurricanes and tornadoes and floods, helping people to cope,” Mead said. “We have rescued hikers, boaters and others who have lost their way. We have used our technology for the greater good again and again.”

Although Mead and others talked about the competitiveness of the industry, Tuesday was more lovefest than slugfest.

“Collaboration has played and will continue to play a major role in our success,” Mead said.

The No. 3 wireless company is making a multibillion dollar gamble that Apple Inc.’s gadget will be the ticket to a turnaround, even though Sprint Chief Executive Dan Hesse told the board in August that Sprint would likely lose money on the deal until 2014, according to people familiar with the matter.

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