A Glimmer of Hope

In line with the Troll’s May 4 post, Sprint will need a drastic restructuring to avoid bankruptcy proceedings post 2010. Here is a scenario that could save the company. The Troll doesn’t believe the Dumb Cowards are capable of pulling it off because it would require decisive and creative thinking. Nevertheless, here it goes.

First, unload Clearwire stock. It may take some time due to the terms of the agreement between S and CLWR, but the sooner the better. WiMAX is not the future. It’s a niche technology and does not offer a favorable revenue stream. Sprint will need the liquidity and reduced expenses by eliminating XOHM. Make a WiMAX trophy and put it in the case with ION.

Move forward with the Erikson deal for managing the CDMA network. Outsource iDEN services to Moto. The reason for this will be clear in a minute.

Spin off Boost by making a stock offering to creditors in return for a reduction of S debt load. Creditors would be willing to accept this given the current strength of Boost. S could finally unload the iDEN network and the costs associated with it, including the outsourcing agreement with Moto. Part of the deal will include a favorable MVNO agreement with S so Nextel customers will continue to be part of the S portfolio.

With a reduced debt load, improved liquidity from the sale of CLWR stock, and reduced costs from the offloading of iDEN, Sprint will now be in a position to upgrade its network to LTE. Qualcomm is developing a duel CDMA/LTE chip and Erikson is the leader in LTE infrastructure deployment. Apple is purportedly developing an LTE capable iPhone for Verizon. It’s not too late for S to get in on the action..hopefully they learned from the last time they passed on the iPhone. Although S will be behind Verizon in its LTE deployment, the trend to open networks will make this lead insignificant. Within 3 years Sprint could be on an equal footing with the big boys. The Dumb Cowards must act now. Otherwise say goodnight to Sprint.