Sprint Announces Tower Sale to TowerCo for $670M Cash

[JFB]

Sprint Nextel Announces Tower Sale to TowerCo for Approximately $670 Million in Cash


OVERLAND PARK, Kan., Jul 23, 2008 (BUSINESS WIRE) -- Sprint Nextel (NYSE:S) today announced an agreement to sell approximately 3,300 towers to TowerCo for approximately $670 million in cash. Additionally, the two companies have entered into a long term leasing agreement where TowerCo will provide Sprint Nextel with wireless communications towers to support the company's CDMA, iDEN and WiMAX networks.
"By leasing rather than owning these network facilities, we can better focus on our core business of providing communications services to consumers, businesses and government customers," said Bob Azzi, senior vice president, Field Engineering and Operations, Sprint Nextel. "Significantly, this transaction provides Sprint Nextel with additional liquidity which gives us greater flexibility in managing our company."

"These are great towers concentrated in large metropolitan markets throughout the U.S. and will benefit as wireless communications continue to grow," said Richard Byrne, TowerCo's CEO.

The specific number of towers and final purchase price will be determined at closing. The transaction, subject to customary closing conditions, is expected to close in 90 days.

Equity financing for this transaction will be provided by Tailwind Capital, Soros Strategic Partners II LP, Stone Tower Equity Partners and Vulcan Capital.

In this transaction, Sprint Nextel was advised by Wachovia Capital Markets, LLC, Citi and the law firm of Jones Day. TowerCo was advised by UBS Investment Bank and the law firm of Paul, Weiss, Rifkind, Wharton and Garrison LLP.

About Sprint Nextel

Sprint Nextel offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two wireless networks serving nearly 53 million customers at the end of the first quarter 2008; industry-leading mobile data services; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. For more information, visit Cell Phones, Mobile Phones, and Wireless Calling Plans from Sprint.

About TowerCo

TowerCo was founded in 2004 by Tailwind Capital and industry veterans Richard Byrne, Chief Executive Officer, and Scot Lloyd, Chief Operating Officer, to meet the infrastructure needs of wireless service providers by developing, owning and leasing communication towers. Soros Strategic Partners invested in TowerCo in December 2005. Currently TowerCo has exclusive contracts to build towers directly for carriers throughout the U.S. TowerCo is based in Cary, N.C. For additional information please visit TowerCo.

Safe Harbor Statement

This news release includes "forward-looking statements" within the meaning of the securities laws. The statements in this news release regarding the business outlook and performance, new products and services, future network capabilities and performance, expected investments, as well as other statements that are not historical facts, are forward-looking statements. The words "estimate," "project," "forecast," "intend," "expect," "believe," "target," "providing guidance" and similar expressions are intended to identify forward-looking statements. Forward-looking statements are estimates and projections reflecting management's judgment based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. With respect to these forward-looking statements, management has made assumptions regarding, among other things, customer and network usage, customer growth and retention, pricing, development, deployment and operating costs, availability of devices, the timing of various events and the economic environment.

Sprint Nextel believes these forward-looking statements are reasonable; however, you should not place undue reliance on forward-looking statements, which are based on current expectations and speak only as of the date of this release. Sprint is not obligated to publicly release any revisions to forward-looking statements to reflect events after the date of this release. Sprint Nextel provides a detailed discussion of risk factors in periodic SEC filings, including its annual report on Form 10-K for the year ended December 31, 2007.

SOURCE: Sprint Nextel

Sprint Media
James Fisher, 703-433-8677
james.w.fisher@Sprint.com
or
Sprint Investor Relations
Steve Virostek, 800-259-3755
Investor.Relations@Sprint.com
or
TowerCo
E. Peter Wolf, 973-857-3233
pwolf@towerco.com

[SmArTeStChIlD421]

this could cost Sprint more cash to lease all these towers.....but in reality in the situation they are in now there are other things that need their focus and tower maintenance is not one of them......

i think this could be a good thing for Sprint

[RadioFoneGuy]

Alot of carriers have done this. All it is, is a fast way to push capital in to the books.

When carriers sell towers its up to the negotiators to work in leasing arrangements.

They may not be paying anything for X amount of years.

[jimbo]

Didn't Sprint sell off a bunch of towers once before? Like 5 or so years ago?

[larry]

Originally Posted by jimbo

Didn't Sprint sell off a bunch of towers once before? Like 5 or so years ago?

Not exactly. They leased 6,600 towers to a company called Global Signal in 2005. Global Signal manages those towers and does have an option to buy them at the end of the lease which is over 20 years away.

[jimbo]

Originally Posted by larry

Not exactly. They leased 6,600 towers to a company called Global Signal in 2005. Global Signal manages those towers and does have an option to buy them at the end of the lease which is over 20 years away.

Thanks for the info Larry. I knew they did something with some towers a few years ago, I just couldn't remember the name of the company or the details...

[bobolito]

Originally Posted by jimbo

Didn't Sprint sell off a bunch of towers once before? Like 5 or so years ago?

I think it was T-Mobile that did that. But it wasn't that long ago.

[spleck]

Originally Posted by larry

Not exactly. They leased 6,600 towers to a company called Global Signal in 2005. Global Signal manages those towers and does have an option to buy them at the end of the lease which is over 20 years away.

I think Global Signal was acquired by Crown Castle.

[spleck]

Is it possible that many of these towers are the synergy sites? This would allow Sprint to sell off Nextel more easily, since all the leases would be handled by a third party.

[larry]

Originally Posted by spleck

I think Global Signal was acquired by Crown Castle.

Yes that happened in 2007 I think. Forgot to mention that.

[Mobile Mike]

This is a smart move for Sprint. They need all the help they can get right now.