Sprint as REIT Might Lease Network Gear and Handsets

Sprint is a company that’s been feeling the heat as of late.  With the continued fall compared to the other three United States carriers, Sprint has hard choices on the horizon, and one might be to do what other people have seen success with.  Truly shocking, yes, but the big yellow carrier and its Japanese parent company SoftBank have some interesting times in the near future, and here’s why.

Sprint has costs to cut, and the end of a deal made seven years ago with Ericsson could prove beneficial for Sprint’s financial future.  The deal stipulated that Ericsson would pay to utilize Sprint’s physical network and the maintenance costs would fall onto Ericsson instead of Sprint.  That deal’s renewal is up in the air at this point, since it’s set to end in 2016, but the way it worked might allow Sprint to follow in the footsteps of Windstream Holdings to help pay off some of their debt.  For reference, Windstream is a year-2000 founded company that owns network hardware in various parts of the Eastern half of the united States, and leases these network hardware to carriers and service providers.  The company also handles in VoIP and satellite television, as well as being partnered with Dish Network.

Knowing that, Sprint’s plan seems to be similar and lease its network hardware out to various companies and groups to finance and remove some of its debt, as well as remove the maintenance costs from Sprint’s tab.  This possible move, for those interested, sees Sprint acting as an REIT, which stands for real estate investment trust, so they would own and lease for profit, while offloading the leased items’ various associated costs to the lessee.  Sprint has yet to set out an official plan to move forward, and this is only a possibility, but it looks like a good possibility.  Lately, Sprint and SoftBank have been working to make partnerships and deals with various companies to lease both network gear and handsets, so an REIT seems like the next move by the big yellow carrier.  This move would allow Sprint to move forward with its network densification initiative, announced a while ago.  We will have to wait to see for sure, though.