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December 01, 2011

Sprint to Support Clearwire's WiMAX, LTE Services Under New Agreements

By Ashok Bindra
TMCnet Contributor

Overland Park, Ka.-based wireless operator Sprint (News - Alert) Nextel and Bellevue, Wash.-based mobile broadband services provider Clearwire have inked new agreements with respect to WiMAX and LTE (News - Alert) services. As a result, Sprint will support Clearwire’s WiMAX and LTE services. The deal is potentially worth up to $1.6 billion over the next four years in payments for WiMAX (News - Alert) services, possible pre-payments for LTE services and potential equity investments, said the partners.

Sprint said in a press release that the agreements further align Clearwire’s (News - Alert) LTE network build as a complement to Sprint’s Network Vision strategy. Also, Clearwire announced that it has made interest payments totaling $237 million on its first-priority, second-priority and exchangeable notes which were due Dec. 1, 2011.

In a statement, said Dan Hesse (News - Alert), Sprint CEO, said, “These agreements are a result of the technical MOU we outlined during our third quarter results call and extend our relationship with Clearwire.” He added, “It provides Sprint improved pricing, allows us to continue to provide WiMAX 4G services to our customers today and to new customers in the future and provides additional LTE capacity to help complement our Network Vision strategy and meet our customers’ growing data demands.”

Likewise, Erik Prusch, president and CEO of Clearwire, commented, “Today’s announcement further cements the mutually beneficial relationship between our two companies… It is an important step toward meeting Clearwire’s key goals of extending our current 4G network arrangement, securing a commitment to our future LTE Advanced-ready network, and funding the business. We continue to move closer to realizing the full value of our deep spectrum resources as we are uniquely positioned to meet the rapidly growing demand for 4G mobile broadband.”

The agreements modify prior wholesale pricing agreements and provide Sprint with unlimited access to Clearwire’s WiMAX network to meet its growing 4G data demands. Under the terms of the agreements, Sprint will pay Clearwire a total of $926 million, approximately two-thirds of which will be paid in 2012, for unlimited 4G WiMAX retail services during 2012 and 2013, subject to certain conditions. The agreements also establish long-term usage-based pricing for WiMAX services in 2014 and beyond.

Plus, Sprint will have access to Clearwire’s WiMAX network through at least  2015. Furthermore, Sprint said that it plans to continue selling WiMAX devices with two-year contracts through at least 2012 and support those devices through the life of the contract. 

The agreements also lay the foundation for the deployment of Clearwire’s planned LTE Advanced-ready overlay network and outline the terms for Sprint to gain access to the additional LTE capacity. 

Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.

Edited by Rich Steeves

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