Sprint: A Bankruptcy Risk?

Sprint Corp. (NYSE: S) could be at risk of a bankruptcy filing over the next four years because of its spend on the iPhone contract and its Network Vision upgrades, according to a research note from Sanford C. Bernstein & Co. Inc.

The Wall Street Journal reported on Monday that Bernstein analyst Craig Moffett calls a bankruptcy filing "a very legitimate risk" in a research note downgrading the carrier to "underperform."

The analyst says that at present it is impossible to predict whether Sprint can successfully negotiate its 4G Long Term Evolution (LTE) upgrades and pull together successful new next-generation devices and services -- or get trapped under a debt mountain in the process.

Why this matters
Sprint has little choice but to spend on network upgrades and the iPhone in order to try to compete with its larger rivals, AT&T Inc. (NYSE: T) and Verizon Wireless . The big spend is a necessary evil for the carrier.

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— Dan Jones, Site Editor, Light Reading Mobile

Jeff Baumgartner 12/5/2012 | 5:39:06 PM
re: Sprint: A Bankruptcy Risk?

Could be a lot worse, I suppose, but initial reaction to this has Sprint shares down 4.84% (14 cents) to $2.75 each in early trading Monday. Moffett, by the way, cut his target to $1.75 from $2.50. JB  

gtchavan 12/5/2012 | 5:39:05 PM
re: Sprint: A Bankruptcy Risk?

I was in the Apple store on Saturday and they said the ATT version of the ipad sold out on the first day.  This can only mean that Apple, knowing that ATT does not have 4G service, did not build that many of those.  Also what is up with not being able to provide Wifi to external devices with ATT? How the heck they missed on that?

It is clear that ATT is losing Market share to Verizon fast.   All of this is because ATT management chose to drag their tail in implementing 4G for 2 years wishing for an monopolist merger with T-mobile while the executives and the unions drained the company from its resources.  

If I were going to sing a swan song I would sing it for ATT, which the worst Telco in the united states. 


Disclosure: I still don't have ATT 1G, 2G, 3G or 4G service in my house in Almaden Valley, San Jose, CA, the heart of technological revolution in the United States.


joset01 12/5/2012 | 5:39:04 PM
re: Sprint: A Bankruptcy Risk?

You might wish it was so, Chuck. But the numbers don't remotely bear you out. AT&T apparently pays the largest dividend out of any tech company on the S&P 500. Even bigger than the one Apple announced today.

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