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