The world of wireless is evolving; 5G and IoT are shaping the networks of the future, and everybody is jumping on board the latest trends, often at great cost of time and money. This means that it would be no understatment to say that free cash and capex are going to play a huge role in the next few years of the industry. Sprint is well aware of this, and has been selling off their equipment and spectrum holdings, then leasing them from the buyers; this generates free cash because they can build out away from the spectrum and tools that they're selling off, and can lease them for cheaper in the mean time. This tactic has allowed Sprint to keep their cash flow up while building out and modernizing their network, and according to CFO Tarek Robbiati, that trend will continue.
Sprint's plans to lease-back their own holdings could continue for quite some time and get them quite some amount of capital, since their total holdings are estimated as being worth around $115 billion, but since they need those network resources to build out, they're practicing a bit of discretion. For this year, they plan to get another $1 billion or so out of their spectrum holdings, bringing the grand total of the capital that this scheme has gotten them up to about $5 billion. That may not sound like a lot, but when it comes to building out using existing spectrum, a little can go a long way.
The plan for remaining spectrum assets, however, is a bit different from the way Sprint has been operating; rather than selling and leasing, they plan to borrow against the assets. Asset-backed securities to the tune of about $1 billion is no big deal for many business lenders, especially those who would do business with a large company like Sprint, so the real question is how they're going to make good on the capital they've secured and pay that loan back. In this case, since part of the capital they're accumulating is mostly earmarked for paying back existing loans, though at least some part of it will end up helping with network buildout, and if things pay off in the way Sprint is hoping it could turn out to be beneficial for them in the 5G race.