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Sprint's revenue beats estimate as network upgrade progresses

Sprint reported higher-than-expected first-quarter revenue on Wednesday, as the company expanded its high-speed coverage and came closer to completing a network upgrade that had caused a massive drop in customers.

Sprint has slashed prices and offered customer guarantees in an attempt to offset subscriber losses after a shutdown of its older Nextel network and from technical problems related to a massive overhaul of Sprint's remaining network.

Sprint's network upgrade is "largely complete," its chief executive officer, Dan Hesse, said in a press release.

The company, 80 percent owned by Japan's SoftBank, posted a profit of $23 million, or 1 cent a share, in the quarter, reversing a loss of $1.6 billion, or 53 cents a share, a year earlier.

Revenue fell to $8.8 billion from $8.9 billion a year earlier, but beat the average analyst estimate of $8.7 billion according to Thomson Reuters I/B/E/S.

The company lost 181,000 contract subscribers, fewer than the average estimate of 293,000.

Sprint shares were up 1 percent to $8.08 in premarket trading. (Click here to get the latest quote.)

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The long-anticipated merger of Sprint and T-Mobile US is not expected to occur before September, with the companies continuing due diligence and preparing a detailed case for a deal before U.S. regulators, according to people familiar with the matter.

SoftBank and T-Mobile owner Deutsche Telekom have agreed to broad terms of a deal, under which Sprint would pay around $40 per share for T-Mobile, valuing the smaller rival at nearly $32 billion, Reuters reported in early June.

Despite agreeing to other key terms such as break-up fees, the proposed transaction is taking extra time to finalize, partly because the companies are keen to bulletproof their arguments for a merger that is sure to face heavy regulatory scrutiny, two of the people familiar with the matter said on Tuesday.

—By Reuters. CNBC contributed to this report.

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