Sprint has extended a lifeline to struggling WiMax provider Clearwire (which it it a majority owner in) and has struck a deal which will give the carrier more 4G options moving forward.
Under the deal, cash-strapped WiMax will receive at least $926 milion from Sprint for WiMax services in 2012 and 2013 and it will run the WiMax network until at least 2015. Sprint has also committed to selling WiMax handsets until the end of 2012 and it will support those until the end of those two-year contracts. The carrier will also dish out some cash to get access to Clearwire’s upcoming LTE-advanced network.
“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, in a prepared statement. “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.”
What does this mean for you? Well, this means if you buy a 4G smartphone on Sprint anytime soon, you can be sure that the WiMax will be supported for the life of the device, even as Sprint moves toward LTE. It also means that Sprint will have more 4G LTE options down the road, although you have to wonder how it would be positioned at this point if it had just waited for 4G LTE to begin with instead of monkeying around with WiMax, full stop.
As for Clearwire, it’s not out of the woods yet, as it will probably have to raise some more cash and it’s long-term future is still not rosy and bright. For years, the company has said that switching to LTE wouldn’t be that difficult because the two technologies share similarities but we’ll have to see if it can actually transition.