T-Mobile officials said the company is no longer relying on Sprint's legacy wireline network to carry its wireless traffic. As a result, the company said it took a non-cash impairment charge of $477 million in the second quarter.
During T-Mobile's recent quarterly earnings call, CEO Mike Sievert was asked whether the company was packaging Sprint's wireline operation for a possible sale.
"As it relates to Sprint wireline asset, you may have seen we made some announcements that we are no longer using that asset to support our wireless business," Sievert replied, according to a Seeking Alpha transcript. "We are obviously conducting a review as to the best way to manage that asset. It's a terrific product with a deep, deep legacy in our company and it's important that we make the right decisions there for the long haul, taking into account how the market has changed over time."
T-Mobile officials declined to answer questions from Light Reading about the situation, including basics such as the size and scope of the network and its financial situation.
In an SEC filing in 2019, before T-Mobile closed its purchase of the company, Sprint reported that its wireline business included "domestic and international data communications using various protocols such as multiprotocol label switching technologies (MPLS), IP, managed network services, Voice over Internet Protocol (VoIP), and Session Initiated Protocol (SIP)."
But Sprint was clearly working to keep the business relevant: "We continue to assess the portfolio of services provided by our wireline business and are focusing our efforts on IP-based data services," the company wrote in 2019. "Standalone voice services have been discontinued and we continue to de-emphasize and shutdown TDM-based data services."
Sprint listed $1.4 billion in wireline properties in 2019, including digital fiber optic cable, transport facilities, transmission-related equipment and network buildings. The business generated around $1.3 billion in revenues, and a loss of $69 million, in Sprint's fiscal year 2019.
Analysts contacted by Light Reading declined to speculate on what T-Mobile might get for the sale of Sprint's wireline network. They also declined to name any possible buyers.
Interestingly, there are rumblings that T-Mobile is working to discontinue some legacy Sprint wireline offerings altogether. For example, several articles suggest that T-Mobile is planning to shutter Sprint's MPLS network in the coming years. However, T-Mobile continues to list a number of wireline services on its website, under its T-Mobile Business division, including MPLS VPN and SD-WAN. The company also continues to link to a Sprint website showing its current IP network performance.
However, T-Mobile has certainly indicated a willingness to shutter legacy Sprint operations. For example, the company shut down Sprint's CDMA 4G wireless network in June.
T-Mobile wouldn't be the only company looking to offload unwanted wireline assets. For example, Altice USA is shopping its rural-focused Suddenlink network to prospective buyers. And Lumen Technologies sold a large part of its US network to Apollo Global Management for $7.5 billion last year.
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