Sprint Nextel, the US’s third largest mobile operator, said that it is not planning to buy the remainder of the equity in US WiMax developer, Clearwire.
Sprint owns 51% of Clearwire, the remainder of the equity being held by Comcast, Time Warner, Intel,…
Sprint Nextel, the US’s third largest mobile operator, said that it is not planning to buy the remainder of the equity in US WiMax developer, Clearwire.
Sprint owns 51% of Clearwire, the remainder of the equity being held by Comcast, Time Warner, Intel, Google, Bright House Networks and the firm’s original shareholders.
Robert Brust, Sprint’s CFO was asked if the firm would be buying up the rest of Clearwire in a conference call with institutional investors.
Brust said that: “An imminent move on that would just be very expensive,” and not something that the telco would consider now.
However he said, in the longer term the operator might want to acquire Clearwire outright.
Clearwire is building a nationwide network based on a next generation technology called WiMax which supports much faster mobile data connections than the 3G mobile networks which are currently used.
However Sprint Nextel and Clearwire have indicated that they may embrace a rival 4G technology called LTE which has been widely adopted by mobile network operators in the US and overseas. This, coupled with speculation that Sprint Nextel might want to reposition Wimax as a wireless alternative to fixed line broadband, has fuelled speculation that Sprint Nextel might seek to buy out its Clearwire partners.
Ron Gruia, North American Telecoms Analyst for Frost & Sullivan told TelecomFinance: “There are a number of reasons for Sprint Nextel’s response over Clearwire. First, you need to have the capital to make a deal like this work, and at the moment a complete buy-out of Clearwire would be expensive. But then there are other issues like the technology itself and this could be driving Sprint’s direction.”
Gruia thought that WiMax was not really a competitor to LTE and could work as a complementary service – especially useful in metropolitan areas. But he though that Sprint Nextel might be well-advised to get another partner onboard with Clearwire to help spread the financial, R&D and technological burden and a tie-up with T-Mobile USA would be a wise move.
He thought that T-Mobile USE would be attracted to WiMax in the short-term as a way of broadening its bandwidth and penetration. As well as the obvious financial capital T-Wire USA would bring, the experience of its parent company T-Wire in WiMax would also bring Clearwire and Sprint -Nextel valuable intellectual capital. Both companies have publically stated their long-term interest in LTE in the US.
Sprint-Nextel was not available for comment at the time of going to press.
