Sprint continues to face challenges in its attempt to regain lost ground against AT&T and Verizon, as the company saw its credit rating downgraded by Moody’s Investors Service on Friday, October 14, according to Forbes.
The move is a long time in coming, spurred largely by the company’s decision to invest in its own 4G network and its high-cost move to add the iPhone. Moody’s suggests the company hurt its long-term prospects by failing to make a deal with Clearwire to split the costs of developing its new network.
“Sprint has missed an opportunity to save billions of dollars of [capital expenditures] by failing to reach a win-win arrangement with Clearwire,” Moody’s Senior Vice President Dennis Saputo said in a statement. “Instead, management will ratchet up the execution risk and go it alone for the 4G upgrade path.”
The Wall Street Journal reports that the downgrade could have a substantial impact on Sprint. The high capital costs it faces in building a new 4G network could necessitate borrowing, which will now prove more expensive with the credit downgrade. The news is not entirely negative as Friday also marked the first time the company’s new iPhones went on sale.