Mr. Hesse – Great Idea – Restructuring 101

Implications: Sprint and Dan Hesse are doing the right thing.  Generate cash without giving away the core business.

Analysis: Dan Hesse has taken the next step in turning around Sprint.  After reorganizing his critical parts of his executive management team (which I am sure is not finished), establishing a new path for Sprint (the new Clearwire venture) and renaming the company, Hesse is looking at simultaneously increasing the company’s liquidity and pay down debt.

The best way increasing liquidity quickly is by selling something you don’t need.  Sprint’s ownership of towers made sense when the company had no liquidity problems.  Controlling your own network assets is always an aspect of running a network that operators gravitate to.

However, when you are affected by a cash constrained environment then the only choice is to raise cash by selling something that is not core to your business.

The tower business is a real estate business.  Time to sell it off for cash and pay down that debt.

The cash generated by the sale and the debt repayment (even a partial debt repayment) will improve the company’s balance sheet.  Very nice.

As for Nextel, I have made several suggestions over the last several months as to the most ideal candidate.  My recommended candidate to purchase Nextel can only be made by the only person (that I know of)to ever assemble a wireless carrier comprised of a hodgepodge of spectrum and was successful at doing it.