Sprint Hedges On Clearwire

December 14th, 2010 by · 2 Comments

In what was one of the less definitive notes of December, Sprint Nextel (NYSE:S, news, filings) offered the markets an update on its relationship with WiMAX protagonist clwr.  I say 'less definitive', because their update was mainly to tell us what they might or might not do:

  • They might exercise their preemptive rights to purchase $760M of those exchangeable bonds that Clearwire just issued.  But they have until January 2, 2011 to make up their minds, which they haven't done.
  • They and the others involved amended the  Clearwire Equityholders' Agreement to allow Sprint to surrender voting rights to reduce its percentage below 50%, allowing them flexibility in avoiding risk to themselves that might derive from Clearwire's own risk.  So they might do that at some point, or they might not.  But now they have the flexibility to do it if they ever actually want to.
  • They have no current plans to buy Clearwire outright, but continue discussing further investment in the company with them.  And whatever happens will happen.

So now that we have that straight, or not, I guess we can all just wait for the holiday season to be over so that Sprint can issue another PR that actually involves something non-hypothetical.  I'm sure everything will be much clearer then.

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Categories: Financials · Wireless

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2 Comments So Far


  • fanfare says:

    Rob, you seem to think Clearwire has a lot of potential. Can you give us some insight on what is really happening with this company? I’d like to know what the adoption rate really is .. tech issues, etc. I’d also like your take on the hurdles this company will see before it “does” manage to become a standard in any market. Thanks

    • Rob Powell says:

      I would say that from a network and tech perspective, Clearwire has a lot of potential to shake things up. From an investment standpoint though, I think there are great bets in the fiber space that have much less risk.

      As for the rate of adoption Clearwire is seeing, that will be the story of 2011 – one way or another. Right now there are lots of projections but precious little data.

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