Sprint in talks to buy Clearwire; deal seen as helpful for carrier's LTE plans
Clearwire currently provides the WiMax 4G service for Sprint's 4G enabled handsets and says it needs $600 million to build out an LTE network alongside WiMax. As we reported, back in July, Sprint reached a deal with wholesale pipeline provider LightSquared in which the latter agreed to pay Sprint $9 billion and give the carrier service credits over a 15 year period in exchange for the right to use Sprint's infrastructure to build an LTE network.
While Sprint already owns a majority of Clearwire, Comcast and Time Warner cable are minority investors in the company which has been operating in the red. Rumors of a deal pushed Clearwire's stock up 30% on Friday to $3.01, the biggest one-day gain for the stock since July 2007. Despite Friday's gain, the stock is still down 42% so far this year.
source: Bloomberg via BGR
1. OhSo3D (Posts: 39; Member since: 22 Feb 2011)
That would be a smart move. Have both Clearwire & LightSquared roll out a 4G LTE network and in a way monopolize a few spectrums.. Maybe even a 5G LTE Advanced network in the future. (;
2. Carlos (unregistered)
Maybe now they can stop working against the ATT/T-mobile merger. Its gonna go through anyways.
Nice move by sprint they do need to start focusing on 4g LTE.
3. William13 (Posts: 23; Member since: 10 Mar 2011)
Haha, on the day Sprint made the deal to work with Lightsquared, I said to everyone that this was a power move so Clearwire would be in a weaker position to negotiate. Sprint has tried buying them before but many aspects stopped it, including Clearwire's stubbornness. Now that Sprint decided to leave WiMax behind, Clear has pretty much no backing and has to be bought out to survive. With Network Vision, Lightsquared, and hopefully Clearwire under their belt, Sprint will be in a very strong position. I don't know what the future holds if the AT&T/T-Mobile merger goes through, and it will make things extremely difficult on Sprint if it does, but hopefully Sprint can hold it together, or we're headed into Ma Bell of the wireless industry.
5. snowgator (Posts: 3210; Member since: 19 Jan 2011)
This has been rumored ever since Sprint acquired the stock to keep Clearwire solvent and became the majority owner. Clearwire just doesn't have any cash options open to it to achieve it's LTE plan. Sprint would do better to have a partner like Comcast as opposed to owning it outright, though, as Sprint still needs to shed the iDen network and get it's own cash flow freed up. Either way, this goes through and Sprint ends up stronger.
As a side note, as long as it will take AT&T and T-Mobile to get ironed out, and with Sprint reorganizing from WiMaxx to LTE and getting rid of the iDen, boy is Verizon looking really, really stable and strong.
6. Forced To (unregistered)
Sprint is now forced to deal with Clearwire.
Sprint appeared to want to dump Clearwire and go with LightSquared.
However, now that LightSquared is getting the red light due to "GPS interference" (right or wrong), Sprint is forced to go back to Clearwire and upgrade them to LTE.