Sprint Nextel Corp has arranged a $1 billion credit facility to buy network equipment from Ericsson for a high-speed wireless project that will involve the shuttering of its Nextel network next year.
Sprint (Overland Park, Kan., USA), the third largest U.S. mobile provider, has been working to eliminate an estimated funding gap of $5 billion to $7 billion, and said on Tuesday it entered the credit agreement, which expires in March 2017, with Deutsche Bank and other banks.
With the vendor financing agreement, spokesman Scott Sloat said Sprint has "largely addressed" funding requirements it flagged last year.
Sprint has been under pressure to raise financing as it committed to a $15.5 billion contract with Apple Inc (Cupertino, Calif., USA) for iPhones on top of a $7 billion network project , which involves upgrading one of its networks and shutting down the Nextel network it bought for about $35 billion in 2005.
Also on Tuesday Sprint announced it may finally shut the Nextel network as early as June 30 next year. The company had already said it would end the service next year but had not given a specific date.
Separately, Sprint also said it would pay back $1 billion of debt set to mature in the fourth quarter of 2013. After the payment, which the company plans to make on June 8, the outstanding balance on the 6.875% notes would be about $473 million, Sprint said.
(Reporting By Sinead Carew; Editing by John Wallace, Jeffrey Benkoe and Phil Berlowitz)