Sprint sells 3,000 towers to TowerCo

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Sprint fire sale

Interesting news for those closely following Sprint’s future today. Cellular-News is reporting that Sprint Nextel has completed the previously announced sale of approximately 3,080 towers to TowerCo for an estimated US$670 million in cash. The two companies have also signed a long-term leasing agreement for TowerCo to provide Sprint Nextel with wireless communications towers to support the company’s CDMA, iDEN and WiMAX networks.

“Leasing rather than owning these network facilities is a more efficient use of resources and allows us to focus more closely on our core business of providing communications services to our customers,” said Bob Azzi, Sprint senior vice president – Network Services. “This deal also gives Sprint additional liquidity and greater flexibility in managing our business.”

From an outsider’s perspective, it’s difficult to say if this is a smart move on Sprint’s part or a desperate cash grab. When the sale was first announced, BBCool reader Chris L. put it into perspective this way:

If they are desperate for the capital, its like reverse mortgaging your house. Not a good idea unless you’re almost dead.

If they aren’t desperate for the capital, then obviously this TowerCo can do it cheaper than they can. To me, that says they aren’t geared for efficiency, good organization, or any other good characteristics. Its not like outsourcing the IT or HR needs of a small company, we’re talking the bread and butter function. If 3M can outsource production of their sticky pads, it would raise serious questions about 3M’s viability.

Of course, on the optimistic side, it could mean they are rolling out LTE or WiMax or something and have it ready to go, and just don’t want to deal with their legacy network themselves anymore. Right? Please?

Thoughts, people? Is this a time for optimism about Sprint Nextel, or a sign that they’re better at selling off their business than running it?

(via CN)

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