Sprint today sold part of its device financing business to a newly formed entity called Mobile Leasing Solutions for $1.2 billion.
The new company is being backed by a group of equity investors, including Sprint’s parent company, SoftBank. Mobile Leasing Solutions was conceived with the help of Brightstar, Sprint CEO Marcelo Claure’s former company, which will help manage some of the reverse logistics associated with leased devices.
The transaction puts the financial risk and cashflow issues associated with leasing phones into Mobile Leasing Solution’s hands. By doing so, Sprint will free up money it would otherwise have to spend procuring, leasing, and managing the return of smartphones.
“Providing mobile devices to customers is the biggest use of cash in the carrier model and with this new structure we have more closely aligned Sprint’s cash flows with those associated with leasing devices to our customers,” said Sprint CFO Tarek Robbiati.
Sprint expects the deal to close during the first week of December.
