“If Sprint’s performance is not substantially improved from current levels by that time, capital may not be made available for the refinancings,” Bernstein said.
If Sprint were to file for bankruptcy protection, its rivals could profit in the short run.
“A Sprint slide to bankruptcy, were one to occur, would temporarily benefit other players (, AT&T, and Verizon Communications), but could ultimately be a negative, as it could yield either increased regulation, or alternatively, a more aggressive post-bankruptcy Sprint with a clean(er) and leaner balance sheet,” the report said.
A next generation LTE iPhone poses new and larger risks for Sprint, because the company does not have sufficient free-and-clear spectrum to launch a competitive LTE network and lacks the money to clear spectrum that is already being used, Bernstein said.
“We expect Sprint’s competitiveness to begin to backslide when LTE becomes the nation’s de facto standard,” the report said.
Sprint’s shares fell on the report.
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Bernstein and/or its affiliates do and seek to do business with companies covered in its research publications. As a result, investors should be aware that Bernstein and/or its affiliates may have a conflict of interest that could affect the objectivity of this publication. Investors should consider this publication as only a single factor in making their investment decisions.
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