Possible Suitor

By Reuters -  |  Posted 2008-08-11 Print this article Print


Analysts said it made sense for money-losing Sprint to look for ways to improve its finances, even though it does not face an imminent liquidity crisis. Sprint ended the second quarter with a $23 billion debt, and cash and marketable securities of $3.5 billion.

"Every piece of the business is for sale at a certain price right now because they continue to struggle," said King.

But he noted that an investment in the iDen network, rather than an outright purchase, could make more sense for NII, which operates in countries such as Mexico and Brazil that have faster wireless growth rates than the United States.

The iDen network has faced technical issues Sprint says it has fixed, but customer cancellations have been exacerbated by the weakening U.S. economy and Sprint expects to continue to lose iDen customers in the next few quarters.

In the fourth quarter, Sprint took an impairment charge of $29.7 billion to write off most of the value of Nextel.

Stanford Group analyst Michael Nelson questioned whether Sprint would be able to find a private equity buyer in such a tough credit market.

"Even if they want to sell iDen, I don't think there's a buyer," Nelson added.

Pali Capital analyst Walter Piecyk said in research note that Sprint could attract multiple bidders willing to pay $5 billion or less for the network, without naming suitors.

(Additional reporting by Jessica Hall in Philadelphia, Editing by Derek Caney and Andre Grenon)

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