It’s a happy day in WiMAX land as Sprint and Clearwire have reconciled their differences and are now back together again. The two are so buddy, buddy that Sprint is going to invest $1 billion in Clearwire and the two companies will share 3G and 4G network resources. It won’t overtake the sheer size of the AT&T and T-Mobile merger, but it is a respectable agreement sure to help Sprint build out its 4G WiMAX offerings.
After a rumor hit the wire yesterday that Clearwire and Sprint were in talks, Sprint confirmed today that it is paying Clearwire a respectable $1 billion for its wholesale 4G services. Sprint will pay Clearwire $300 million in 2011, $550 million in 2012 and another $175 million in prepayments for service in 2011, 2012, and beyond.
Sprint also negotiated a wholesale partnership with Clearwire in which both companies can sell each other’s 3G and 4G networks to third parties. This “I use your network and you can use mine” sharing agreement will boost both companies’ wireless portfolio and allow them to target markets they could not tap alone.
Overall, this agreement aligns Sprint more closely to Clearwire and helps solidify Clearwire’s tenuous financial state. The 4G wireless wholesaler gets a nice boost of cash and has the support of Sprint for the next several years. Sprint retains its position as Clearwire’s #1 customer and can piggyback on Clearwire’s growing 4G network. It’s a win-win situation for the two companies and the wireless industry as a whole.
The full press relase with the financial details of this agreement are located on the next page.