Comment (7)Sprint has raised $1.8 billion in vendor funding from its three main infrastructure suppliers to fund its Spark 4G rollout, the carrier announced Wednesday.
Nokia Networks , Samsung Corp. and Alcatel-Lucent (NYSE: ALU) all chipped in on the financing, which Sprint Corp. (NYSE: S) says it will use to purchase 2.5GHz network equipment and related services from key suppliers. The money, all guaranteed by Sprint, includes $800 million from Nokia, $750 million from Samsung and $250 million from Alcatel-Lucent.
The vendor financing was just part of the financial changes Sprint announced today, detailed here in a press release. The carrier also said Alcatel-Lucent helped it get a $300 million loan from Export Development Canada (EDC), and that it amended the terms of its existing secured equipment credit facility with Ericsson AB (Nasdaq: ERIC), used to finance $1 billion in network equipment purchases and services from the vendor.
The Federal Communications Commission (FCC) has also approved Sprint's request to reduce its 800MHz incumbent reconfiguration costs by $22.6 million, bringing the total to $434 million, down from the original cost of $850 million in early 2014.
Sprint CEO Marcelo Claure is speaking tonight at the Citi conference, where he may elaborate more on the new financing. The carrier has leaned on its vendors for funding before, but there's a heightened drive to accelerate its oft-delayed Spark rollout under SoftBank Corp. 's leadership. The vendor financing is especially notable considering that Softbank certainly has its own deep pockets for Sprint's network buildout efforts. (See Sprint Chases $3B in Vendor Financing and Sprint Must Spend Big to Go Big With 4G.)
"Sprint needs to invest in the 2.5GHz they bought with Clearwire to deliver differentiated services and that will cost billions of dollars," BTIG Research Managing Director Walt Piecyk tells Light Reading. "While it's positive that vendors are willing to finance these purchases, the reality is that SoftBank has plenty of resources to fund this necessary network build."
Sprint had a liquidity position of $8.8 billion, with $5.3 billion in cash, cash equivalents and short-term investments as of September 30, 2014. Its stock was trading up by 0.6% to $4.22 following the announcement Wednesday.
— Sarah Reedy, Senior Editor, Light Reading
