Yesterday there was a piece in the Wall Street Journal suggesting that Sprint’s board was actively discussing the pros and cons of letting TMobile USA invest in clwr. That would certainly be an easy way to fund the rest of Clearwire’s buildout and possibly gain an ally in the LTE/WiMAX popularity contest. There have also been occasional rumors (unlikely ones IMHO) over the past year suggesting that TMobile USA and Sprint Nextel (NYSE:S, news, filings) ought to merge, and coming together on Clearwire’s 4G network could be a first step. But a faction of Sprint’s board is said to be dead set against it, suggesting it would strengthen a rival unnecessarily. Honestly, I think it just isn’t likely to happen.
From Sprint’s point of view, they are just much less desperate than they were last year or the year before. They don’t need to make a drastic move, and so far Clearwire’s subscriber gains have been off the charts. Why share that with anyone? As for the remainder of the funding for Clearwire’s buildout, they do have options. WiMAX may have enemies in the financial community, but it has friends too.
And from TMobile’s point of view, their HSPA+ network is holding its own against early 4G speeds and, therefore, they don’t need to rush into anything just yet. They need a partner who needs them back, and whom they would have more leverage with. A subordinate position to Sprint in Clearwire sounds like a good way to stay #4 indefinitely. Harbinger’s LightSquared has practically been tailor-made for TMobile’s benefit, I think they’re just making sure the venture has all its ducks in a row before they throw their weight behind it.
So, while the street always thinks every decision is up against some sort of deadline, I don’t see that either of these companies really has enough of a reason to do anything dramatic and therefore they probably won’t. They’ll consider it of course, but they just won’t take any action at this time – and the opportune moment will quickly pass. Anyone out there think I’m missing it?
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