Sprint Nextel lost $326 million, saw its revenue fall to $8.8 billion and lost 1.3 million customers in the third quarter of 2008, the company said today.

The net loss is slightly better than in the second quarter, when Sprint was $344 million in the red, but the present revenue is down from $9.1 billion.  A year ago the company turned a $64 million profit on $10 billion of revenue.

Sprint CEO Dan Hesse

CEO Dan Hesse emphasized the positive. “During tough economic times, we tightly managed our business to generate and retain cash and maintain substantial liquidity while continuing to reduce debt. At the same time, we made advancements in improving operations and delivering on the promise of the Now Network.  Customer care metrics have improved steadily throughout the year and external surveys are confirming we’re providing a better customer experience,” he said in a prepared statement.

Sprint also said today that it amended the terms of its credit agreement that began in late 2005.  The carrier now has $4.5 billion in revolving credit, compared to $6 billion originally.  Also, Sprint paid $1 billion of its loans, officials said.

To help fix the company, Sprint is considering new ways to position the former Nextel push-to-talk service, introducing new devices, partnering with technology industry giants for its WiMAX network and trying to improve its reputation for poor customer service. Sprint also recently released a software upgrade for its flagship Instinct smartphone.

Analyst Kate Price, of Technology Business Research, said Hesse’s turnaround efforts are beginning to work, but it could take years to complete.  “Sprint’s customer satisfaction and churn reduction efforts are showing signs of success.  The sequential increase of 15 basis points in postpaid churn, which totaled 2.15% in 3Q08, was largely expected due to seasonality, though TBR notes the increase in churn was half that of historic third quarters, pointing to improvement.  The company did reduce postpaid churn 15 basis points year-to-year, which demonstrates the company is making some progress in churn reduction over time,” she wrote in a report today.

However, “TBR believes Sprint will continue to lose revenue at a rapid pace in upcoming quarters as the company attempts to control subscriber losses.”