Sprint in talks over Clearwire buyout

Rob Powell/Telecom Ramblings
22 Aug 2011

According to a Bloombergreport this morning, Sprint Nextel may finally be preparing to get off the fence on its plans for Clearwire.

Apparently they are in talks with Comcast and the other cable MSO minority shareholders of Clearwire about how to fund the beleagured Wimax phenomenon, and the possibility of a buyout by Sprint is one of the big alternatives on the the table.

Sprint has spent the last year sending mixed signal after mixed signal about its 4G plans, with the most recent turn being its wholesale deal with LightSquared under which it will help build out the network for cash and credits toward its use. Clearwire, meanwhile, recently revealed its own intention to build out LTE in urban areas, assuming it can raise the money to do so as it works feverishly to bring its finances into balance overall.

Sooner or later, Sprint will have to choose whether to fish or cut bait with Clearwire, and today’s reports indicate that they may be about to make that choice. But while the details are murky, it seems to me there can be only one approach here. Somehow take the struggling two upstarts, merge their spectrum and remove the immediacy from the GPS debate, and use Clearwire’s base to get a running start on LTE-Advanced in a few years (but later than LightSquared’s plans). They have the wholesale deal with LightSquared in place, the next step is to bring Clearwire in house and tweak its direction to complement those plans.

The alternative would be to abandon Clearwire and start fresh. That sounds less messy, but that would waste the subscriber momentum that Clearwire has and probably lead to market dismay with how far behind the competition Sprint is voluntarily putting itself.

As for the cables, they have seemed less and less interested in the whole wireless angle for years. They certainly don’t seem likely to pump a billion dollars into Clearwire at this point, do they? Seems like those rumored negotiations have one main point – determining a price tag.

This article was authored by Rob Powell and was originally posted on Telecomramblings.com

Rob Powell is founder & editor of Telecom Ramblings, which was set up in 2008. The website is dedicated to discussing trends and developments in the telecom industry.

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