Here's how that argument goes: Sprint PCS can't let its 12 mostly ailing affiliates die, four of which are publicly traded -- Alamosa (APS ), UbiquiTel (UPCS ), AirGate PCS (PCSA ), and US Unwired (UNWR ) -- and could default on their debt, says Marcus Jones, an analyst with Moody's Investor Service. So, Sprint PCS would have no choice but to bail them out, fall deeper into debt itself -- and, with interest payments looming, become a willing bride. That would kick off consolidation, in which the Big Six wireless carriers
Unfortunatly, the guy Marcus Jones at Moody's is pretty clueless. The problem with his analysis, is he thinks PCS has no choice but to bail out the affiliates. Nothing could be further from the truth!
The reality is.. Is that the Sprint Affiliates were a stroke of genius on the part of Sprint. Sprint effectively leases their spectrum to the affiliates who took on the risk of financing, building out, and marketing the Sprint PCS brand name in the less populas areas of the US.
Now that the affiliates have fallen on hard times. Spint can just sit back and watch them fall one by one into Bankruptcy. All the affiliates in fact own in the way of assets are the network infrastructure. The affiliates (for the most part) have no regulatory licenses to actually operate their network infrastructure assets.
So if you are PCS.. You simple let the affiliates sink into Liquidation and you buy the network assets for pennies on the dollar. After all, how many other bidders will there be for a fixed network along with all of the Air Interface Base Station equipment if you could never turn it on and generate revenue in it's installed configuration, because you would not have FCC licenses to do so.
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