Hesse: Cellular 'Relatively Immune' to Downturn

BALTIMORE -- Sprint Corp. (NYSE: S) CEO Dan Hesse says the cellular industry will be relatively unharmed by the economic downturn, and he stuck to the expected year-end schedule for the closure of the Clearwire LLC (Nasdaq: CLWR) deal, here at the XOHM WiMax celebration on the Baltimore docks.

Hesse said during his presentation here that cellular services are now an "essential" for the consumer and that wireless-based businesses overall are in a better position in the telecom industry. "We feel relatively fortunate, in that we're relatively immune," he told the crowd.

This isn't to say that there will be no impact on Sprint's cellular business from the downturn. "The impact from the economy we've seen is more on the business side than the consumer side," Hesse told Unstrung after his brief appearance at the XOHM event: "We saw it earlier in the year with companies downsizing and needing fewer devices."

Local wireline services may in fact be more of a victim of the downturn than cellular services these days, Hesse contends. "The larger threat in telecom is [local] wireline -- that has flipped. Consumers are much more likely to cut the cord on wireline than give up their wireless."

Meanwhile, Sprint continues to keep all options open vis à vis selling off assets to pay down its debt. Reporters at the event once again asked about a possible sell-off of Sprint's Nextel iDEN network.

"We'll talk about that when we're ready to talk," Hesse said. "I think I've been fairly straightforward, though we'll look at everything -- everything is on the table."

Hesse stuck with the line that the new Clearwire deal will close "by the end of the year." He also talked up the usefulness of having six "robust" founders, potentially able to further invest in the company, in the face of currently nervous capital markets.

Comcast Corp. (Nasdaq: CMCSA, CMCSK), Intel Corp. (Nasdaq: INTC), Google (Nasdaq: GOOG), and the cablecos are pitching in $3.2 billion for Clearwire to build out its WiMax network in the U.S. Clearwire has said it will need another $2 billion to complete the rollout.

"If the capital markets are just shut down, there is clearly the ability to invest further there," Hesse said of the partners. He also suggested that there may be other possible investors in the WiMax network out there but wasn't ready to name any names.

— Dan Jones, Site Editor, Unstrung

joset01 12/5/2012 | 3:29:55 PM
re: Hesse: Cellular 'Relatively Immune' to Downturn Hmmm, care to speculate on potential new investors?

materialgirl 12/5/2012 | 3:29:51 PM
re: Hesse: Cellular 'Relatively Immune' to Downturn How about big equipment vendors, like CSCO?

Separately, note how "imminent" has changed to "year end" on the CLWR deal. Understandable in this environment.
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