Sprint sells its cellular towers (so it can lease them back)
OVERLAND PARK, Kan., Jul 23, 2008 (BUSINESS WIRE) -- Sprint Nextel (NYSE:S) today announced an agreement to sell approximately 3,300 towers to TowerCo for approximately $670 million in cash. Additionally, the two companies have entered into a long term leasing agreement where TowerCo will provide Sprint Nextel with wireless communications towers to support the company's CDMA, iDEN and WiMAX networks.
First, I'm surprised it only takes 3,300 towers to cover their US market, especially considering that some of those towers may be overlapping CDMA and iDEN cells.
Secondly, doesn't this seem sort of silly? There very well may be a solid cash flow reason to lease these towers instead of owning them, but it just seems so typically Sprint to me: build up a huge project, then sell it or shut it down.
I can imagine a buy back in the future: "As a wireless solutions provider, Sprint Nextel Motorola's world-class tower infrastructure is essential to our core business. The addition of these thousands of towers to our network will make it possible for Sprint Nextel Motorola to implement the latest upgrades to our award-winning wireless network faster than ever."
[Sprint.com via Phone Scoop
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