Sprint spectrum lease deal to generate cash ‘within the next several months’

Sprint’s continued interest in raising cash means it expects to announce a leasing deal involving its wireless spectrum assets “within the next several months,” the company’s top financial officer said Wednesday.

Tarek Robbiati, the Overland Park-based wireless carrier’s chief financial officer, said teams are working hard on negotiating a transaction. Sprint already has raised more than $4 billion through sale-and-leaseback deals involving smartphones and network equipment it owns. It added access to $2 billion more through a bank financing arrangement.

Spectrum refers to the specific frequencies of over-the-air signals that carry Sprint customers’ phone conversations, app downloads, texts and other traffic. The federal government licenses specific frequencies to wireless carriers in the same way that television stations and radio stations have spectrum licenses to broadcast signals on their own specific frequencies.

Wireless companies, including Sprint, paid billions of dollars to secure spectrum licenses for the airwaves they use to carry wireless traffic.

“There is a lot of work happening now on Spectrum Lease Co., as we call it,” Robbiati said, mirroring language on Sprint’s earlier phone and network lease finance deals that generated cash for the company. “We will update the market in due course, but this is expected to happen probably within the next several months.”

Robbiati spoke at an industry conference and offered few details about the planned transaction. He did not indicate, for example, how much money it would generate for Sprint. He repeated earlier statements that Sprint would continue to own and use any spectrum it tapped in a transaction to raise money.

Sprint has waited to work on a spectrum lease financing deal until it secured cash using smartphones and wireless network equipment. Those deals helped squelch some concerns about Sprint’s immediate financing situation.

“Only three months ago there were a lot of questions about our liquidity position,” Robbiati acknowledged.

But Robbiati did not want immediately to use Sprint’s spectrum to raise money because it is so vital to Sprint’s value as a business. Starting with it would put him at a disadvantage if he tried to “negotiate on raising money on something so important when you are perceived to have liquidity issues,” he said.

The cellphone and network leasing deals had been struck with Sprint’s Tokyo-based parent company, SoftBank Group Corp., and others. Robbiati did not indicate whether SoftBank would similarly play a role in a spectrum financing deal.

This story was originally published May 25, 2016 at 11:36 AM with the headline "Sprint spectrum lease deal to generate cash ‘within the next several months’."