The third largest wireless carrier, Sprint Nextel Corp. ( S - Analyst Report ) , announced that the termination of iDEN networks would be over by June 30 next year. This would aid the company in concentrating on the core Sprint platform, which includes CDMA, WiMAX, Long-Term Evolution (LTE) and other network technologies.

The elimination of the Nextel platform is the part of the Network Vision plan, which is progressing well. Sprint intends to decommission 30,000 cell sites to 38,000 from the existing 68,000, of which 9,600 cell sites will be shut down by the end of the third quarter this year and the remaining in the next year. The company has already terminated about 1,300 cell sites as of March 2012.

Over the past few years, Sprint has been struggling to integrate its CDMA mobile network with Nextel’s iDEN wireless network (acquired in 2005), resulting in subscribers losses to other carriers like AT&T Inc. ( T - Analyst Report ) and Verizon Communications ( VZ - Analyst Report ) . Management believes the termination of Nextel platform will provide immediate savings from utilities and maintenance, and additional savings from tower rent going forward.

At the same time, Sprint raised $1 billion of credit facility to purchase network equipment from Ericsson ( ERIC - Analyst Report ) . The credit agreement will expire in March 2017. This financing is in addition to the $2 billion raised in March this year and $4 billion raised in the fourth quarter last year.

Sprint is taking advantage of the falling interest rates in the capital market as it is in the midst of a multibillion dollar network upgrade. Though the company has enough liquidity, it is raising funds to address the growing costs of network upgrade, iPhone subsidies, debt maturities and working capital requirements.

Sprint expects to spend $4–$5 billion in upgrading its network and building LTE in collaboration over two to three years, thereby minimizing its free cash flow. The company also promised to pay $15.5 billion to Apple Inc. ( AAPL - Analyst Report ) over the next four years. As a result, the company has to pay 40% more subsidies than other smartphones that would equate to more than $200 per device.

Further, Sprint needs fund to repay its debt, which is due in March 2013 with $300 million, followed by $1.5 billion in October 2013.

We are maintaining our long-term Neutral recommendation on Sprint. For the short term (1–3 months), the stock retains a Zacks #3 (Hold) Rank.