Sprint poised to pay Clearwire up to $1.6 billion, preventing it from a fallout
Things were looking dreary in November, when Clear announced it will miss the payment, potentially facing penalties from creditors and spiking borrowing costs afterwards. The company needs the money just to operate, but it also has to go ahead with its network upgrade plans.
Sprint, which is a majority owner, and Clearwire's biggest customer at the same time, looks to expand its stake and the current network agreement against its money. If Clearwire goes to the markets for additional $400-$700 million, Sprint will be a part of it as well, up to its $347 million right, based on the stake it holds.
The carrier will also give Clearwire $926 million for network usage in the next two years, and Clear will support it until 2015, when the last contract of Sprint's WiMAX phones will expire. Moreover, Sprint will pay up to $350 million over two years for LTE from Clear, if build-out milestones are met by June 2013. The companies plan to introduce the first data cards and smartphones with LTE connectivity in 2013.
Sprint will have a lot on its plate in the near future - the iPhone bet, maintaining its WiMAX network supplied by the troubled Clearwire, and looking to switch to its LTE at the same time, not to mention phasing the Nextel merger - so hopefully all will end well.
1. remixfa (Posts: 14253; Member since: 19 Dec 2008)
umm.. where is sprint getting all this money? They must have one heck of a credit card bill.. lol
2. arcq12 (Posts: 733; Member since: 13 Oct 2011)
yeah that's the reason why VZW doesnt wanna acquire Sprint.. they have tons and tons of debt..
5. rendHELL (Posts: 304; Member since: 09 Nov 2011)
hahah... careful there... many people will be out jobs...
12. TheInfamousCJ (Posts: 20; Member since: 24 Nov 2011)
All I can do is smh @ Sprint they are doing their best to stay competitive and profitable. My only query is why invest in wimax, invest in clearwire, and then decide to go LTE when wimax 2 is an available technology and it doesnt hurt your business relationship with clearwire.
3. scvzw2 (Posts: 32; Member since: 20 Jun 2010)
Sprint is self destructing in 5.....4.......3.....2......
7. GALAXY-S (Posts: 701; Member since: 07 Jun 2011)
holy crap that means no raise for us sprint employees for a very long time !
8. ledbetterp3 (Posts: 467; Member since: 31 Aug 2011)
I don't think Sprint will be releasing LTE very soon, and if they do, it won't be expanded too much. At least for awhile...
9. arcq12 (Posts: 733; Member since: 13 Oct 2011)
I believe Sprint will do launch their LTE network late Q1 or Q2. And they will expand it more aggressively than how they expanded WiMax.. they are planning to switch to LTE in the first place thats why they didnt bother expanding their WiMax network anymore.. i know Sprint sucks but believe it or not, they have their word.
10. theoak (Posts: 324; Member since: 16 Nov 2011)
CLEAR is looking to skip "LTE" also ... and wants to deploy LTE Advanced instead.
So I wonder how this will play into Sprint's plans. I suppose they could always sell USB sticks.
Sprint, like it or not, I think is being forced to work with CLEAR because the LightSquared deal is on hold, so Sprint has to do something to remain competitive, and right now, CLEAR is all they have.
I am a CLEAR home user for phone and internet. I CAN'T WAIT when CLEAR flips to LTE-Advanced ;) Hopefully they will still be affordable ...
11. jamrockjones (Posts: 345; Member since: 26 Oct 2011)
This will be a critical time for Sprint. With all these new advancements they'll either end up growing significantly or go broke trying!
13. xq10xa (Posts: 213; Member since: 07 Dec 2010)
CLEAR 4G internet is really good if you live in the right area. You can even take the modem with you and simply plug it in to a wall anywhere CLEAR is available. I dunno I like em
14. roscuthiii (Posts: 1887; Member since: 18 Jul 2010)
Yeah, when I moved into my place a didn't realize that when the landlord renovated he didn't include and phone or cable jacks on the wall. Maybe the contractors he used were horrible and just dry walled right over the outlets. I don't know. But that's something I just took for granted as being included and didn't even look for. Clearwire was there to save the day though by just being able to plug into a wall.