| Telecommunication equipment can provide the lessee | | | | in the lessee?s financial statement. This bolsters the |
| with many advantages that are not available if the | | | | financial condition of the lessee. |
| equipment is bought or rented. Research in this field | | | | Leasing any type of equipment helps the lessee in |
| has proved that approximately $2,169,999,458 worth | | | | retaining the financial strength of the company and |
| of equipment is leased by businesses in the United | | | | thus provides working capital that is necessary for the |
| States of America each year. | | | | smooth working of a business. The internal revenue |
| The primary reason behind leasing telecommunication | | | | service does not consider the lease as a purchase but |
| equipment is that leasing offers many advantages | | | | rather a tax-deductible overhead expense and the tax |
| such as tax deductions, balance sheet management, | | | | burden on the lessee is considerably reduced. |
| flexibility, better asset management, improved cash | | | | Leasing also provides the lessee with flexible payment |
| flow, easy upgrades, and immediate write offs. | | | | options and payments can be made according to the |
| Telecommunication equipment needs regular upgrades | | | | income if the income is seasonal in nature. Some |
| because of the ever-changing technology. The risk of | | | | leasing companies also provide the lessee with |
| getting stranded with obsolete equipment is imminent if | | | | working capital and the amount is usually fifty percent |
| the equipment is not leased but is bought directly from | | | | of the net asset value that is being leased. |
| the market. This is the main reason that the | | | | Leasing telecommunication equipment provides the |
| telecommunication industry is dependent on leasing | | | | lessee with state-of-the-art equipment at cheaper |
| programs. | | | | rates and helps the business to compete with other |
| Different types of equipment that can be leased | | | | companies in the same field. This may not be the case |
| include multiplexes, switches, telephone systems, voice | | | | when the equipment is bought, because other |
| processing hardware, transformers, and routers. | | | | companies may oust a new company that is not |
| Leasing has many advantages and the most important | | | | performing well because of lack of proper equipment. |
| of them all is that the lease does not appear as a debt | | | | |