Can Sprint Afford 20,000 New Cell Sites?  

In February, Sprint announced they would add 9,000 new LTE sites and as many as 20,000 new cell sites in the near future. But some analysts question if the company’s balance sheet is strong enough to take on this project given its large pile of debt, $21 billion, and weak free cash flow generation of less than $2 billion in 2014. Sprint seems to be upping the ante with the new pricing, and has even offered to pay all customer costs to switch over. However, none of that will matter if they can’t build out their network. After Sprint sat out of the AWS-3 auction, some asked whether they should sell off some of its 2.5 GHz licenses or ditch wireline long distance. I think they will do both,” says Oppenheimer’s Tim Horan. “The cash needs are high.” Cowen and Company’s Colby Synesael speculates that Sprint will run out of cash by the end of March 2017, regardless of cost cutting. He also believes Softbank will be slow to pour in more money. According to Seeking Alpha, Regardless of selling its spectrum, Sprint will have trouble with more financing, Craig Moffett [of Moffett Research] says, ‘As EBITDA comes down, leverage goes up and the company’s ability to fund its cash burn and debt maturities with still more debt dries up.’”