Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Android
    • Android
    • Apple
    • Mobile

    Sprint Selling More Assets in Fight for Long-Term Profitability

    By
    Todd R. Weiss
    -
    April 29, 2016
    Share
    Facebook
    Twitter
    Linkedin
      Sprint

      Sprint is continuing to corral a growing pile of cash liquidity by selling more of its network assets, this time for $1.1 billion, as it works to reverse a 10-year pattern of losses.

      In its latest deal, Sprint has signed a second contract with Mobile Leasing Solutions, LLC (MLS) to sell about $1.3 billion worth of unidentified network assets for $1.1 billion in cash in a lease-back arrangement, the carrier announced April 29.

      In addition, Sprint also announced that it has signed a deal for a $2 billion bridge loan for 18 months with Mizuho Bank that will provide additional cash. Both transactions are in addition to a $2.2 billion lease-back deal the company announced in early April that involved $3 billion of the company’s network cell towers, according to an earlier eWEEK story.

      The latest transactions mean that Sprint has secured about $5.3 billion in cash in April as it continues to try to reverse long-time losses and return to profitability.

      In the most recent deal with MLS, the new lease-back arrangement will be accounted for as financing on its balance sheet, with its assets remaining in property, plant and equipment and continuing to be depreciated over their remaining useful lives, according to Sprint. The payments made to MLS under the lease-backs will be reflected as principal repayments and interest expense over the respective terms.

      MLS was formed by a group of equity investors, including Softbank, and has obtained debt financing from several lenders, according to Sprint. Brightstar Corp. is again providing lease management and asset tracking for the transaction, as well as reverse logistics and device remarketing services.

      The 18-month bridge financing contract “provides Sprint with $2 billion of liquidity as the company continues to execute its turnaround initiatives, densify and optimize its network, and progress toward other financing transactions in the future,” the company said in a statement. The bridge loan can be expanded by up to another $500 million in additional money, if needed.

      A sprint spokesman could not be reached for comment by eWEEK on April 29, but the company said in its statement that it will address questions about the deal during its fourth quarter and full-year 2015 earnings call on May 6.

      Bill Menezes, an analyst with Gartner, told eWEEK that the latest Sprint lease-back effort “looks like more of the same—a need to raise cash for network expansion and to cover the costs of Sprint’s heavy promotional activity in acquiring customers.”

      The cash-raising work is also “a big reason Sprint decided to go big on device leasing … whether or not they’re feeling more financial pressure to do so will become clearer when we see their earnings next week,” said Menezes. “Back-to-back good quarters in terms of adding postpaid customers and improving profitability would seem to tell us the turnaround finally is getting traction. We’ll see.”

      Earlier this month, Sprint unveiled its plans for its original $2.2 billion cash infusion for a network gear lease-back. That gear will be bought back in 2018 when the company projects its financial standing will be improved. Essentially, these deals allow Sprint to raise large sums of cash at a time when it sees an opportunity for a turnaround, buoyed by growth in the number of its mobile phone subscribers, a company spokesman said earlier. The idea is that Sprint will be in a stronger financial position in the future when it pays the cash back.

      In January, Sprint reported revenue of $8.1 billion for the third quarter of 2015, while sharply narrowing its operating loss for the period to $197 million from $2.54 billion a year earlier and adding 501,000 new wireless postpaid customers. The wireless carrier’s third-quarter results portrayed a company that is still in transition as it fights competitors like Verizon, AT&T and T-Mobile in a very volatile consumer market.

      Todd R. Weiss
      As a technology journalist covering enterprise IT for more than 15 years, I joined eWEEK.com in September 2014 as the site's senior writer covering all things mobile. I write about smartphones, tablets, laptops, assorted mobile gadgets and services,mobile carriers and much more. I formerly was a staff writer for Computerworld.com from 2000 to 2008 and previously wrote for daily newspapers in eastern Pennsylvania. I'm an avid traveler, motorcyclist, technology lover, cook, reader, tinkerer and mechanic. I drove a yellow taxicab in college and collect toy taxis and taxi business cards from around the world.

      MOST POPULAR ARTICLES

      Big Data and Analytics

      Alteryx’s Suresh Vittal on the Democratization of...

      James Maguire - May 31, 2022 0
      I spoke with Suresh Vittal, Chief Product Officer at Alteryx, about the industry mega-shift toward making data analytics tools accessible to a company’s complete...
      Read more
      Cybersecurity

      Visa’s Michael Jabbara on Cybersecurity and Digital...

      James Maguire - May 17, 2022 0
      I spoke with Michael Jabbara, VP and Global Head of Fraud Services at Visa, about the cybersecurity technology used to ensure the safe transfer...
      Read more
      Cloud

      IGEL CEO Jed Ayres on Edge and...

      James Maguire - June 14, 2022 0
      I spoke with Jed Ayres, CEO of IGEL, about the endpoint sector, and an open source OS for the cloud; we also spoke about...
      Read more
      Applications

      Cisco’s Thimaya Subaiya on Customer Experience in...

      James Maguire - May 10, 2022 0
      I spoke with Thimaya Subaiya, SVP and GM of Global Customer Experience at Cisco, about the factors that create good customer experience – and...
      Read more
      Big Data and Analytics

      GoodData CEO Roman Stanek on Business Intelligence...

      James Maguire - May 4, 2022 0
      I spoke with Roman Stanek, CEO of GoodData, about business intelligence, data as a service, and the frustration that many executives have with data...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2022 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×