Optical/IP Networks

Clearwire-Sprint Deal Soon?

The WiMax relationship between Clearwire LLC (Nasdaq: CLWR) and Sprint Corp. (NYSE: S) could be rekindled as early as next week -- with a little help from Google (Nasdaq: GOOG) and friends -- according to a ThinkEquity LLC analyst.

Talk of a renewed relationship for the power couple of U.S. WiMax has been floating around almost since the partnership dissolved last year. Recently, however, it has been given increased emphasis by The Wall Street Journal reporting that the operators were in talks with Google, and Clearwire's CEO confirming that it was working on a WiMax roaming deal with Sprint. (See Clearwire Roams With Sprint.)

ThinkEquity analyst Eric Kainer says in a report that Clearwire is "close to the finish line" in striking a new network deal with Sprint, which would be financially backed by Best Buy, Google, and SK Telecom (Nasdaq: SKM).

Kainer tells Unstrung that a deal could be announced at the Mobile World Congress in Barcelona next week, or soon after. "I believe that's the most likely time for Clearwire to announce the deal," he says.

Spokespeople from Google and Sprint declined to comment on the analyst's report and comments.

Kainer suggests that Google's motivation in funding such a venture is to reach more people sooner with the Xohm WiMax system rather than wait for the 700 MHz broadband, on which the company has also shown interest in bidding. Kainer says the search giant would be able to "support tens of millions" of users nationwide in 2009 as part of the Xohm venture. Kainer says that 700 Mhz spectrum services will be complementary but a "sideshow" to Xohm until 2012 or thereabouts.

The motivation for Clearwire and Sprint in a freshly funded Xohm venture is more obvious. It gives them the money to properly fund a WiMax network build-out. Kainer says that, as it stands, Clearwire's business plan is only partially funded, while Sprint's financial troubles are writ large across the business press. (See Sprint & the Myth of Subscriber Assets.)

— Dan Jones, Site Editor, Unstrung

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