Thursday, December 13, 2012

Sprint Bids for Remaining Stake in Clearwire

Sprint Nextel has offered to acquire the remaining shares of Clearwire that it does not already own for a reported $2.1 billion.
Clearwire confirmed that it is currently in discussions with Sprint regarding a potential strategic transaction.
  • In October, Sprint increased its stake in Clearwire to 50.8% by acquiring the shares of Eagle River Holdings for $100 million.  Sprint previously held a 48% share in Clearwire, so this October transaction restored Sprint's majority control of the firm. Eagle River Holdings is controlled by telecom pioneer Craig McCaw.
  • Clearwire holds the largest spectrum portfolio in the U.S. but in upper bands.  Its spectrum is an average 163 MHz in the top 100  U.S. markets.
  • Clearwire operates a nationwide WiMAX network and is planning to make the transition to TD-LTE.  Its main wholesale customer and investor is Sprint, which has extended its 4G agreement through 2015.  The companies have outlined ways of bridging their FD-LTE and TD-LTE networks with dual-mode devices that are under development.
  • Also in October, SoftBank announced plans to invest $20.1 billion to acquire a 70% in Sprint.  The deal consists of $12.1 billion to be distributed to Sprint stockholders and $8.0 billion of new capital to strengthen Sprint’s balance sheet.  The investment aims to accelerate Sprint's next generation network and its competitive position as the No. 3 U.S. mobile operator.  For Softbank, this represents a major leap beyond its home market of Japan, where it is the No. 3 mobile operator and No. 2 wireline broadband provider. The companies hope to get the deal done by mid-2013, pending regulatory approvals.