Feature Article

June 11, 2012

Sprint Cuts Shares Below Fifty Percent in Clearwire, Restores Voting Rights

Ranked as the nation’s number three telecom services provider in Newsweek’s 2011 green rankings, Sprint Nextel Corp. said on Monday that it has reduced the voting shares in mobile broadband communications company, Clearwire Corp. As a result, it no longer has a majority stake in the company, which increases its voting rights in the venture without risk of a default trigger on its own debt.

Prior to this decision, Sprint owned 54 percent shares in the mobile broadband carrier. Last year, Sprint, the biggest shareholder in Clearwire, reduced its voting shares in the company to below 50 percent in order to avoid any risk of a default trigger on its own debt at a time when Clearwire faced a possible loan default, reported Reuters.

As per the Reuters report, due to a recent equity that Clearwire issued, Sprint said its economic interest has declined to below 50 percent, giving it leeway to make its voting interest in line with its economic interest in Clearwire.

In a statement, Sprint spokesman Scott Sloat, said, "Now that our economic interest has fallen below 50 percent, we are reclaiming our full voting rights so that our voting rights and economic rights are once again aligned."

Meanwhile, media reports indicate that Sprint is planning to supplement its own LTE network with Clearwire's TD-LTE backbone, as it plans to distance itself on the business side from Clearwire.

Recently, Sprint has also announced plans to transition business and government customers from its iDEN (2G) Nextel National Network onto Sprint Direct Connect, its next-generation, push to talk service, which operates on the service provider’s 3G CDMA network. In addition, the company also revealed plans to cease service on the iDEN Nextel National Network as early as June 30, 2013 as part of its Network Vision plan, a series of network updates designed to offer next generation network capabilities to customers.

Edited by Brooke Neuman

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