Wednesday, November 30, 2011

Sprint Extends Funding and WiMAX & LTE Partnership with Clearwire

Sprint Nextel and Clearwire reached agreements valued at up to $1.6 billion over the next four years in payments for WiMAX services, possible pre-payments for LTE services and potential equity investments. The agreements further align Clearwire's LTE network build as a complement to Sprint's Network Vision strategy.

Key points:

  • 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,

  • Long-term usage-based pricing is established for WiMAX services in 2014 and beyond.

  • Sprint will have access to Clearwire's WiMAX network through at least 2015.

  • Plans lay the foundation for the deployment of Clearwire's LTE Advanced-ready overlay network and outline the terms for Sprint to gain access to the additional LTE capacity.

  • Clearwire's TDD-LTE rollout will capitalize on its deep spectrum resources.

  • Sprint will pay Clearwire up to $350 million in a series of prepayments over a period of up to two years for LTE capacity if Clearwire achieves certain build-out targets and network specifications by June 2013.

  • Long-term usage-based pricing for LTE services is established for 2012 and beyond.

  • Clearwire and Sprint will collaborate on a network build plan and will jointly select LTE macro-cell sites to cover Sprint's high usage area “hotspots.�?

  • Clearwire plans to seek additional funding before initiating the build-out of its LTE Advanced-ready network. Sprint may participate in an equity offering on a pro rata basis up to $347 million.

  • Clearwire and Sprint will work collaboratively to support the ecosystem for TDD-LTE in Band Class 41 for devices, chipsets and standards.

  • Sprint expects to launch devices including laptop cards and phones that will utilize Clearwire's TDD-LTE network in 2013.

“These agreements are a result of the technical MOU we outlined during our third quarter results call and extend our relationship with Clearwire,�? said Dan Hesse, Sprint CEO. “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.�?