What Could Sprint Be Really Up To With Clearwire?

Earlier this morning, Sprint Nextel announced that it will buy out the remaining 49 per cent of Clearwire for about $2.2 billion. The deal will pay shareholders of the wireless company $2.97 a share down from an earlier offer of $2.90 a share. This will help expand Sprint's 4G LTE network, which the wireless carrier has been struggling to build. It will also help the company compete on the same level as its two bigger competitors, AT&T and Verizon Wireless, both whom have been offering superior 4G LTE for far longer. Sprint is the third largest wireless carrier in the United States.

Sprint will utilize Clearwire's complementary 2.5 GHz spectrum with its own, which will strategically position the wireless company to improve competition, achieve operational efficiency and offer improved 4G LTE service to its customers.

Sprint CEO Dan Hesse said, "Today's transaction marks yet another significant step in Sprint's improved competitive position and ability to offer customers better products, more choices and better services. Sprint is uniquely positioned to maximize the value of Clearwire's spectrum and efficiently deploy it to increase Sprint's network capacity. We believe this transaction, particularly when leveraged with our SoftBank relationship, is further validation of our strategy and allows Sprint to control its network destiny."

Bright House Networks LLC, Comcast Corp and Intel Corp, who together own about 13 percent of Clearwire's voting shares, have committed to vote their shares in a show of support of the transaction. Softbank, who has recently merged with Sprint, also provided its consent.

The deal with Clearwire was inevitable after Softbank, the third largest carrier in Japan, bought a 75 per cent stake in Sprint in October, which provided $8 billion Sprint can use to enhance its spectrum portfolio.

For the customers of both Sprint and Clearwire, this doesn't mean a whole lot just yet. Clearwire will continue to support its one million plus retail customers. Sprint will in turn, continue to support existing customers with older phones that use the WiMax network. The devices will eventually be replaced with LTE radios. The combination of Softbank, Sprint and Clearwire can help drive innovation and could lead to more mobile devices that are compatible with more networks.

However for Sprints competitors, including Dish Network who is just now taking steps to join the wireless game, this could mean a whole lot more. Spectrum policy analyst, Tim Farrar doesn't believe that it was a coincidence that that Sprint's offer to buy Clearwire happened to come on the dame day that Dish Network received FCC approval to use its AWS-4 spectrum for wireless uses. Dish did potentially have a deal for quite a few months with Clearwire which only awaited the official FCC approval on Dish's spectrum. A process that was not helped by Sprint's intervention in efforts to obtain access to the H-block. He believes Dish might be forced to sell the spectrum to AT&T which could in turn cause AT&T to sell some of its PCS spectrum (which Sprint will probably buy) to gain approval from the FCC for the deal with Dish Network. You can read his full thoughts on it, but it seems that Sprint has positioned itself in a win-win situation.

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Crystal Kube

Crystal may be new to the wonders of Android but has quickly become a fan. When she's not writing for Android Headlines, she is writing for and running her own website as her alter ego Evvy or creating and editing game videos. You can often spot her on Xbox Live, where she continues to refer to herself in the third person.