Sprint will use Network Equipment & Spectrum for a $5B Loan


Sprint, it's almost like beating a dead-house, but they are still in the red for an eighth straight year. The company has over $34 billion in debt right now, and as most of you know, collectors want their money. The company has been working to get back on track since Masayoshi Son and SoftBank bought the company in 2013 – well they took a controlling stake in Sprint actually. After attempting to purchase T-Mobile and seeing that the regulators were going to have none of it, Son decided to swap CEO's and put in Marcelo Claure who built and ran Brightstar before Son bought that company as well. Since Claure took over at Sprint, they've dropped prices quite a bit and have been targeting their competitors customers, and tempting them to make the switch to Sprint. It's worked, but not to the extent that the company would like.

Sitting at $34 billion in debt isn't a good thing. Especially since that is more than twice Sprint's market value. However, Son has a plan to start paying off these debts that his US carrier has accumulated over the years. Tarek Robbiati, who is Sprint's CFO, noted that the proposal is to essentially create a subsidiary under Son's corporation that will give Sprint money. This new subsidiary will be able to use Sprint's wireless equipment and some wireless spectrum as collateral. The carrier doesn't want to give up control of the spectrum which is worth more than $115 billion right now, and in the day and age of carriers wanting and needing more spectrum, this shouldn't be a surprise. Right now, Sprint is looking to get about $3-5 billion from these loans in 2016.


An analyst at Gimme Credit stated that spectrum gives Sprint a way to be measured, since "Sprint can't be measured on cash flow."Spectrum is the most valuable asset to any carrier, really. Without spectrum, they can't offer service to their customers, without letting them roam on their competitors' towers. Sprint does have the most spectrum out of all of the US carriers. A big part of that is due to them picking up Nextel in 2004 (which was a huge headache for all parties involved), and also picking up Clearwire which they completed in 2013 after already owning a pretty big stake in the company dating back to their WiMax days.

This new plan from Masayoshi Son may work out pretty well for Sprint, or it may just delay the inevitable. We'll have to wait and see, as something like this can't change anything overnight.

Share this page

Copyright ©2016 Android Headlines. All Rights Reserved.

This post may contain affiliate links. See our privacy policy for more information.

Alex has written for Androidheadlines since 2012 as Editor of the site and traveled the World to many of the biggest Smartphone and Technology events. Alex has a background in Technology and IT and Deep Passion for Everything Android and Google. His specialties lay in Smartphones of all budgets, Accessories, Home Automation and more. Contact him at [email protected]

View Comments