US mobile operator Sprint Nextel said that it will require US$5-7bn in financing over the next few years in order to cover the costs of its iPhone deployment and its network upgrade, known as “Network Vision”. In a webcast accompanying the…
US mobile operator Sprint Nextel said that it will require US$5-7bn in financing over the next few years in order to cover the costs of its iPhone deployment and its network upgrade, known as “Network Vision”.
In a webcast accompanying the company’s Q3 results on 26 October, Sprint CFO Joseph Euteneuer said that, assuming a target cash balance of US$2bn, its projected funding needs will range between US$5-7bn.
“To adjust our projected financing needs during the next couple of years, we expect to refinance our US$4bn of upcoming debt maturities through October 2013 through the public debt markets and raise incremental vendor financing of approximately US$1-3bn to cover a portion of Network Vision costs,” Euteneuer said.
Sprint has appointed three vendors – Alcatel-Lucent, Ericsson and Samsung – to work on the Network Vision programme. Earlier in October, Sprint announced that it would be rolling out LTE on its own spectrum by the middle of 2012.
Sprint’s Q3 results showed that the company made a net loss of US$301m in the quarter up to 30 September, compared to a net loss of US$911m for the same period last year.
Sprint also said yesterday that it has amended the terms and increased by US$150m the total committed amount of its revolving credit facility, increasing it to US$2.24bn.
Agreement with Clearwire
Sprint also announced a non-binding co-operation agreement with WiMAX wholesaler Clearwire, in which Sprint holds a 54% stake.
The agreement will see the two companies work together on technical specifications for Clearwire’s planned LTE network.
Sprint CEO Dan Hesse said that it was necessary to get this agreement in order to clear the way for a commercial agreement between the two companies, which would see Sprint paying to use Clearwire’s planned LTE network.
Hesse said that a definitive agreement would allow Sprint to manage its own fixed network costs by offloading some 4G usage on to the Clearwire LTE network. This would allow Sprint to “benefit from Clearwire’s large spectrum portfolio on a resale basis”.
Hesse suggested that Clearwire LTE capacity would begin to come online from 2013. He emphasised that the first choice for Sprint would always be to use its own network, but that a Clearwire agreement would allow it to augment its own network capacity.
Clearwire currently provides WiMAX services on a wholesale basis, but it intends to add LTE to its network.
How does this affect LightSquared?
Sprint also signed a network sharing agreement with the satellite/terrestrial venture LightSquared in July.
Hesse said Sprint has spectrum capacity sufficient until 2014. He added that if LightSquared got financing and FCC approval, this would add another year’s worth of capacity growth to the Sprint network.
The potential commercial agreement with Clearwire would add “additional years – plural” to that capacity as well.
“If LightSquared comes online, that gives us another potential use of capacity, but we’re making very good progress (we believe) on the technical front with Clearwire, and I’ll leave it at that,” Hesse said.
