Credit ratings agency Moody’s has said that it is concerned about US telco Sprint Nextel’s credit profile and that it believes the company lacks a unified long term plan.
In a report yesterday, Moody’s said that Sprint’s ‘Network Vision’ plans to upgrade…
Credit ratings agency Moody’s has said that it is concerned about US telco Sprint Nextel’s credit profile and that it believes the company lacks a unified long term plan.
In a report yesterday, Moody’s said that Sprint’s ‘Network Vision’ plans to upgrade its network, announced in December, were a “mild positive” and would allow large savings.
But it was critical of Sprint’s silence regarding its strategic partner Clearwire, the 4G provider in which Sprint has a 51% stake.
Clearwire has been attempting to deploy a 4G WiMAX network in the US, but it has been meeting tough competition from companies deploying LTE, a rival 4G technology.
In December, Clearwire announced a bond offering of over US$1.1bn in order to finance the deployment of its WiMAX network. It is believed that Clearwire will require even more billions of dollars to continue the deployment.
Moody’s said that it saw clear inefficiencies in the parallel development of Sprint and Clearwire’s networks.
It said: “Moody’s views the parallel efforts of Sprint’s US$5bn Network Vision and Clearwire’s buildout (which Moody’s estimates could cost up to US$5bn more to cover the entire US) as inefficient.”
In its report, Moody’s also said it believed that Clearwire made its debt offering only after it had failed to get equity financing from Sprint.
Sprint made clear in a statement on Clearwire on 13 December that it was not planning to acquire the company, although it said that it was continuing to hold discussions with Sprint concerning further investment in the company.
