Sprint is mortgaging part of its wireless airwaves to raise $3.5 billion to grow its business. Fred Katayama reports.
Sprint is putting part of its wireless airwaves up for collateral to fund its business. The wireless carrier initially aims to raise $3.5 billion by mortgaging about 14 percent of the airwaves. Barclays analyst Amir Rozwadowski says it's a creative way to raise cash. (SOUNDBITE) AMIR ROZWADOWSKI, ANALYST, BARCLAYS, (ENGLISH) SAYING: "What Sprint is trying to do is find the means to find the best possible options to finance its business, the lowest cost to capital, and, I think that, when you look at the previous traunches funding put together, it has been finding ways to find cost to capital that were lower than some of the traditional means." Sprint raised over $1 billion last November and then more than $2 billion in April through similar lease back deals. The company, now controlled by Japan's SoftBank Group, has been burning through cash in an intense competition for subscribers. It ended last fiscal year with more than $3 billion in the red. Rozwadowski says, under its new CEO and SoftBank, Sprint has done a good job cutting costs and signing on new customers, but it still needs to improve the quality of its telecom network and iron out solid investment strategies.