Sprint pledges support to Clearwire

Dec 01, 2011 By PETER SVENSSON , AP Technology Writer

(AP) -- Sprint Nextel Corp. is mending fences with independent subsidiary Clearwire Corp., pledging Thursday to use the data network Clearwire is planning to build and to participate if the company raises more capital.

The announcement is a lifeline for Clearwire, which is struggling financially. It's using a called WiMax that has been bypassed by all phone companies except , and lacks the funding to upgrade to the industry's standard technology.

Clearwire shares climbed 43 cents, or 24.2 percent, to $2.21 in midday trading. The stock has been very volatile this year, as investors have followed the blow-by-blow of Clearwire's tempestuous relationship with Sprint.

Overland Park, Kan.-based Sprint owns 54 percent of Kirkland, Wash.-based Clearwire, but doesn't have voting control. Sprint now resells access to Clearwire's WiMax network as "Sprint 4G."

Two months ago, Sprint made clear that it had no plans to keep selling WiMax-compatible devices after the end of next year, and it said nothing about using the new network Clearwire is planning. That sent Clearwire shares crashing.

On Thursday, Sprint said it will collaborate with . on building the new network and expects to sell phones that can use it, starting in 2013. It will pay up to $350 million in advance for network capacity if Clearwire meets certain buildout goals.

Clearwire will still need more funding for the network. Sprint said it would participate in a share offering, buying shares worth up to $347 million to maintain its stake in the company.

Also Thursday, Clearwire said it's made $237 million in interest payments that were due Thursday on its debt. The had reported two weeks ago that the company was considering whether to delay the payments.

Sprint also said it's paying Clearwire $926 million for unlimited use of its network in 2012 and 2013, and intends to establish a usage-based contract for 2014 and beyond.

Sprint is upgrading its own network to use the same technology Clearwire is planning to use, dubbed LTE, for Long-Term Evolution. It has also struck a deal to collaborate with privately funded startup LightSquared on its LTE network. That network, however, is being held up by concerns that it will interfere with GPS navigation devices.

Given that Sprint is building its own network, analysts believe it will minimize Clearwire's role over time, despite Thursday's announcement. That leaves "Clearwire's strategic role in doubt long-term," said Michael Nelson at Mizuho Securities.

Sprint shares fell 1 cent to $2.69 in morning trading.

Explore further: 4.5 million smartphones were lost or stolen in US in 2013

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Sprint: No more Clearwire devices after 2012

Oct 07, 2011

(AP) -- Sprint Nextel Corp. said Friday that it will stop selling phones and other devices compatible with Clearwire Corp.'s network at the end of next year, as it switches customers to its own higher-speed, fourth-generation ...

Clearwire slammed as CEO reportedly mulls default

Nov 18, 2011

(AP) -- Shares of wireless broadband network operator Clearwire Corp. plunged Friday after its chief executive told The Wall Street Journal that the company is weighing whether to make a large interest payment on Dec. 1.

Sprint down after testy meeting with analysts

Oct 08, 2011

(AP) -- The struggling wireless carrier Sprint Nextel Corp. said Friday that it will need to raise more money to build a higher-speed data network even as it must spend more to subsidize sales of the new iPhone to its customers.

Sprint posts smallest quarterly loss in 4 years

Oct 26, 2011

(AP) -- Sprint Nextel Corp. on Wednesday reported its smallest quarterly loss in four years, as it continued a turnaround and kept getting better at keeping and attracting customers.

Cisco to supply Clearwire with WiMax devices

May 13, 2009

(AP) -- Clearwire Corp., which is building a nearly nationwide wireless data network, says Cisco Systems Inc. has agreed to make devices that can use that network.

Recommended for you

Hand out money with my mobile? I think I'm ready

Apr 17, 2014

A service is soon to launch in the UK that will enable us to transfer money to other people using just their name and mobile number. Paym is being hailed as a revolution in banking because you can pay peopl ...

Quantenna promises 10-gigabit Wi-Fi by next year

Apr 16, 2014

(Phys.org) —Quantenna Communications has announced that it has plans for releasing a chipset that will be capable of delivering 10Gbps WiFi to/from routers, bridges and computers by sometime next year. ...

Tech giants look to skies to spread Internet

Apr 16, 2014

The shortest path to the Internet for some remote corners of the world may be through the skies. That is the message from US tech giants seeking to spread the online gospel to hard-to-reach regions.

Wireless industry makes anti-theft commitment

Apr 16, 2014

A trade group for wireless providers said Tuesday that the biggest mobile device manufacturers and carriers will soon put anti-theft tools on the gadgets to try to deter rampant smartphone theft.

Dish Network denies wrongdoing in $2M settlement

Apr 15, 2014

The state attorney general's office says Dish Network Corp. will reimburse Washington state customers about $2 million for what it calls a deceptive surcharge, but the satellite TV provider denies any wrongdoing.

User comments : 0

More news stories

Growing app industry has developers racing to keep up

Smartphone application developers say they are challenged by the glut of apps as well as the need to update their software to keep up with evolving phone technology, making creative pricing strategies essential to finding ...

Making graphene in your kitchen

Graphene has been touted as a wonder material—the world's thinnest substance, but super-strong. Now scientists say it is so easy to make you could produce some in your kitchen.