Sprint to issue $6.5 billion in new debt
Such practices are not uncommon in the corporate world, though America’s third largest carrier has been having a tough time chipping away at debt accumulated from its acquisition of Nextel years ago.
Now that the Nextel network is shut down, Clearwire is in the stable and SoftBank has taken majority ownership of the company, Sprint needs to focus on actually making money at some point, something that has eluded the carrier for some time now.
Unfortunately, Sprint got into a bidding war with DISH over Clearwire, the latter pulling over $1 billion extra in the process. Its net income to revenues has been negative since anyone can remember, putting a lot of pressure on the carrier. Aggressive pricing plans, "unlimited data" and even availability of the iPhone has, thus far, not attracted as many subscribers as hoped.
2014 (or hopefully this holiday season) is viewed as when SoftBank will work something disruptive to draw customers to Sprint again. In the mean time however, money needs to change hands. Of the $6.5 billion in new debt being issued, $2.25 billion will be in 8-year notes at 7.25% and $4.25 billion will be 10-year notes at 7.875%.
1. HASHTAG (unregistered)
Sprint isn't going to gain the customer base it wants unless they work hard(er) on beefing up their network. Yes, they may have unlimited data and a somewhat acceptable price for its plans, but their data speeds are well below spectacular and their LTE speeds aren't that impressive either (my average speeds at highest were 4.5 mbs down and 2.0 up). And it also seems like Sprint is slowing down on rolling out its LTE network. Like when was the last time we heard of Sprint's LTE expansion?
22. cripton805 (Posts: 907; Member since: 18 Mar 2012)
Yes. Their 3g is so bad in my area I cant even use it most of the time. Their pricing isnt even that great its within $10 of the Verizon plan I used to have. Except now with unlimited calling being the only difference at the time. We are now getting lag on calls and texts. Its getting worse. I live in Central Coast CA. Near Santa Barbara. I shouldnt be getting these speeds in a place like this when Im not in the mountains and away from populations like LA.
2. Mxyzptlk (limited) (Posts: 2846; Member since: 21 Apr 2012)
Unlimited data + the world's greatest smartphone should be instant success for Sprint. But they need to update their network.
5. PapaSmurf (Posts: 6648; Member since: 14 May 2012)
All the iPhone did to Sprint was put it further into debt and slow down their network dramatically.
6. Mxyzptlk (limited) (Posts: 2846; Member since: 21 Apr 2012)
That's not Apple's fault. Sprint had the opportunity to upgrade their existing infrastructure but instead they went with 4G WiMAX in a hurry to be the first carrier with 4G. Now it's costing them even more. If Sprint had not have gotten the iPhone they would have been bleeding customers left and right.
15. apocalypsebc (Posts: 146; Member since: 07 Dec 2010)
PapaSmurf never said it was Apple fault. I do agree with you on the fact that Sprint rushed to get 4G WIMAX just to be the first to have 4G, but Sprint also made a mistake in the deal with Apple. T-Mobiles deal with Apple came at the right time and they took their time getting the Iphone. Even the carriers in China are taking their time getting the Iphone and that's where the Iphone is Manufactured. Sprint could have done some things differently that could have been a lot better for them at this point in time. Things seem to be looking better in Sprints future now. Once this debt is taking care of and Sprint focuses on making smarter decisions, they could possibly give Verizon and AT&T some real threat and competition.
17. Daftama (Posts: 546; Member since: 03 Nov 2012)
Five sprint some time in about 3-4 years sprint will have one of the best service out there... Yea they never made a smart decision in the career of sprint but look at them they are still number 3 lol.. Not that soft bank is in it will be a lot different just time thats all.. And when convert the Nextel towers it will improve service
21. Fallout09 (Posts: 409; Member since: 17 Oct 2011)
Wrong..... Why cant people seem to understand that Sprint was in a "Use It Or Lose It" situation for some of their bandwidth. Essentially WiMax was ready.... LTE was not.
19. SellPhones82 (Posts: 384; Member since: 11 Dec 2008)
Yep, their deal with the devil is going to cost them in the end. Even Verizon may owe Apple around $14 BILLION for not selling enough iPhones (they have to sell $23.5 billion worth of iPhones this year—more than double what it sold in 2012). T-Mobile was smart to hold off on their deal with Apple until Apple needed them more than they needed Apple. As market share fell so did the amount of $ Apple was requesting for their iconic phone. Plus since only the iPhone 5 has LTE all the 4 and 4S are sucking the life out of the old EVDO network.
26. a_merryman (Posts: 546; Member since: 14 Dec 2011)
Really? Because all data so far indicates that Sprint is well on it's way to meeting the terms of the deal and thus owing Apple nothing.
28. downphoenix (Posts: 2235; Member since: 19 Jun 2010)
that may be true, but the iphone was a big hit to the network, so they may meet their sales target, but good luck on retention.
8. MorePhonesThanNeeded (Posts: 616; Member since: 23 Oct 2011)
What smartphone is that? Nearly none of the smartphones out are actually smart. Still can't power down at appointed times, nor charge at set times or do anything remotely smart aside from being a portable PC...that isn't smart since there isn't anything smart that it does of it's own accord. I wonder who coined that term anyway? Closest thing to a smartphone is the Moto X which actually does something that seems smart, it listens for your voice to give it instructions and all without killing your battery.
We really should come up with a new word for smartphones, I have yet to come across anything remotely smart about any of them. Perhaps PC Phone as that more accurately describes them, smart phone....not so much. Lol.
3. ajac09 (Posts: 1213; Member since: 30 Sep 2009)
Sprint REALLY needs to work on there network. Added a line to test them out again and god its still horrible.
4. moslondon (Posts: 19; Member since: 07 Mar 2013)
well here in texas around houston my average speed is between 20-30 down and 8 up
10. PAPINYC (Posts: 2044; Member since: 30 Jul 2011)
Right!! And JayZee is the new Michael Jackson.
25. miles16852 (Posts: 189; Member since: 20 Oct 2011)
lol, and your the idiot,, I get the same DL and UL speeds here in Maryland,,
12. a_merryman (Posts: 546; Member since: 14 Dec 2011)
Same for me in the DC area, and the LTE coverage is getting better every week. Can't wait for them to turn on LTE over 800 and 2500.
7. ngo2dd (Posts: 773; Member since: 08 Jul 2011)
A lot of people cry about how slow they are but depend on your location.
16. moslondon (Posts: 19; Member since: 07 Mar 2013)
Right.... The 3g network is really slow but the 4g is getting better i used to have less than 10down and now i have more than 20down in the same area
23. cripton805 (Posts: 907; Member since: 18 Mar 2012)
Yeah. I usually get... about .001 down or less on 3g.
24. DonkeySauce (Posts: 138; Member since: 03 Dec 2011)
I get about a 0.3 down if it doesn't time out.
9. PAPINYC (Posts: 2044; Member since: 30 Jul 2011)
Maxwell!!! Typo' second paragraph: "dept" [accumulated] …
BTW, any idea if they plan on taking care of Mary, too?
13. techaman (unregistered)
its called having the worst service ever full bars and lte i get 7.5 speed normal 4g is about 3 and still sometimes never gos so f it i am leaving after july when contract is up.
14. JMartin22 (Posts: 647; Member since: 30 Apr 2013)
I lol at the people that call the iPhone the world's best phone lol. You're paying for a low-tier midranger at best.
18. Mr.Mr.Upgrade (Posts: 425; Member since: 30 Aug 2011)
Lol... IPhone better innovate September 10.. Are we crown them to be the next blackberry
29. Steve2121 (Posts: 2; Member since: 04 Sep 2013)
Doesnt surprise me that sprint is still struggling. Just imagine how much debt they will be in when they eventually shut down WiMax. Haha not smart at all. They rushed to 4g and now they are even further behind. T-Mobile LTE is so my much faster in the suburbs of philly then crappy sprints.