Sprint Spinning Off New Power Related Company

April 18, 2016 - PRLog -- The fourth largest wireless network operator in the United States, Sprint Corporation has implemented a new strategy that would positively impact its financial stability with the collaboration of Softbank. Sprint is recognized as one of the most innovative companies in the field that focuses on rapid development. It was the first national carrier to introduce wireless 4G technology in the country.  However, the company has been experiencing a downward spiral in terms of revenue over the last decade.

The strategy implemented by Sprint includes the establishment of Network Lease Co - an external entity, which purchased $2.2 billion worth of cell tower network equipment from the company. The investment on these assets will be made by Softbank and other external investors. The money invested on the equipment will be driven to Sprint as cash flow. However, this equipment will be sold once again to Sprint by Network Lease Co once the company's financial standing improves. It is projected that Sprint will have the necessary resources to make this move by 2018.

According to Sprint spokesman, Dave Tovar, this strategy hopes to allow the company to improve its financial footing today as it moves towards profitability. As a company that has been losing money for the past 10 years, Sprint was indeed in desperate need for a bold move that would help the company to retain its position as a top player in the industry. Even though there isn't a unanimous agreement on the effectiveness of this plan by the financial world with the decrease in stock values, Sprint strongly believes that it will give the company enough space and time to progress towards its financial goals. This move also aims towards improving overall cash flow of the company by taking costs out of the business. Network investor entities such as TowerPoint Capital (http://www.towerpoint.com) are keeping a close eye on the strategy as it could become the turning point that directs one of the biggest players in the business in the right direction.

When considering its current financial status, Sprint had a total liquidity of $6 billion at the end of last year. It also confirmed the ownership of an additional $600 million under vendor financing agreements. These assets will be utilized for the purchasing of 2.5 GHz network equipment.

It was also mentioned that the money collected by the external investors and its parent company by the newly established entity will be paid back to Sprint in unequal payments through January 2018.

If this strategy follows through to reap the expected outcomes, the impression the financial world has on Sprint, most importantly, current and potential investors in the telecommunication industry, will improve. In that sense, this is a calculated risk taken by Sprint that would increase the sustainability of the company when considering its long-term goals by making it more attractive to investors.