Sprint Nextel Sells Its Towers; Raises Around $670 Million

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Dianne See Morrison

mocoNews.net
Thursday, July 24, 2008; 6:00 AM

Sprint ( NYSE: S) Nextel is ditching its cellphone towers. In a bid to raise some much needed cash, the troubled carrier has agreed to sell nearly all of its towers to the private-equity backed firm TowerCo for around $670 million in cash, the two companies announced Wednesday. Sprint will sell around 3,300 towers to TowerCo and lease them back from the firm for both its current CDMA and iDEN networks, as well as for its future WiMax efforts.

Sprint Nextel's SVP of Field Engineering and Operations Bob Azzi said the deal would allow the carrier to focus on its core business of "providing communications services." Increasingly, both the US and Europe operators are viewing the maintenance and upkeep of their own towers as a non-core part of their operations and selling them off to cut operating costs. Azzi added that the transaction would also give Sprint "additional liquidity which gives us greater flexibility in managing our company." The carrier is expected to put the money raised toward paying down some of its $24 billion debt. The deal is expected to close in 90 days. The exact number of towers to be sold and the final purchase price will be determined then.

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