Sprint is said to be in talks to gobble up the remaining 49 percent of Clearwire it doesn't already own, according to new reports from CNBC and the Wall Street Journal. The deal is meant to sort out issues that Sprint has had in steering the decision-making process of Clearwire's business, sources told the WSJ, and it would help Sprint acquire the spectrum rights currently owned by Clearwire. Sprint is currently a wholesale customer of Clearwire's network, along with FreedomPop, NetZero, Cricket, EarthLink and a number of others.
The WSJ says that despite talks, a deal could be blocked by Japanese carrier SoftBank's current proposal to acquire a 70 percent majority ownership stake in Sprint, and also by the need for Clearwire's shareholders to approve the deal. Sprint could attempt to make the deal's successful closure conditional on the SoftBank deal going through, too, so it's far from a fait accompli.
Sprint acquired its majority stake in Clearwire back in late October, increasing its percentage ownership from 48 percent to 50.8 percent. At the time Sprint, made a point of spelling out that the deal did not grant Sprint control over the company, nor did it mean that Clearwire's financials would be at all combined with Sprint's. Sprint has also owned more than a 50 percent stake in Clearwire in the past, but backed off last June in a move intended to reduce its liability for Clearwire's debt obligations at the time, according to Fierce Wireless.
The SoftBank deal would furnish Sprint with the funds necessary to help it begin to turn around Clearwire's money-losing business, the WSJ says, something which the company couldn't take do on its own without significantly affecting its balance sheet. That would pave the way for Sprint to acquire Clearwire's TD-LTE network and 2.5GHz spectrum ownership, which would give Sprint a key strategic long-term spectrum resource to help build out its network.
We've reached out to both Clearwire and Sprint for additional comment, and will update if we hear back.
Update: Clearwire got back to us with the following: "As a matter of policy, we do not comment on marketplace rumors or speculation."
Sprint Nextel offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel is widely recognized for developing, engineering and deploying innovative technologies, including two wireless networks serving almost 49 million customers at the end of the second quarter of 2009; industry-leading mobile data services; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone.
Clearwire, founded in October 2003 by telecom pioneer Craig O. McCaw, is a provider of simple, fast, portable and reliable wireless high-speed Internet service. Clearwire customers connect to the Internet using licensed spectrum, thus eliminating the confines of traditional cable or phone lines. Headquartered in Kirkland, Wash., the company launched its first market in August 2004 and now offers service in 50 markets across the U.S. as well as in Europe.