Sprint Ponders Clearwire Strategy
According to a Wall Street Journal report, Sprint Corp. (NYSE: S)'s board of directors is debating whether or not to let T-Mobile invest in Clearwire. The WiMax operator still needs billions to build out its national mobile broadband network, and Sprint needs to decide whether to fund that itself or rely on a new partner, perhaps even a competitor, according to the article.
The report also notes that T-Mobile hasn't made any kind of offer yet and that these board room discussions regarding T-Mobile are all part of Sprint's decision-making over its Clearwire funding strategy.
This is the latest speculation about T-Mobile, Sprint, and Clearwire. Back in May 2008, a rumor surfaced that T-Mobile's parent, Deutsche Telekom AG (NYSE: DT), was actually interested in buying Sprint. It was difficult to see sense in such an acquisition then from a technology point of view because Sprint and T-Mobile use different network technologies, CDMA and GSM, respectively. (See DT & Sprint: A Bargain in the Balance? and A DT Bid for Sprint?)
But the situation is different now. Even though T-Mobile is more at home with the other proto-4G technology, Long Term Evolution (LTE), than with WiMax, the fact that Clearwire is testing LTE and seriously considering how the two technologies might coexist in its network makes any deal with Sprint or Clearwire look more attractive for T-Mobile. (See Clearwire Clears Up LTE Plans .)
For T-Mobile, a stake in Clearwire would give the operator an instant 4G story in the US, which it doesn't have. The operator said recently that it is in no rush to launch LTE in the country. Indeed, its new HSPA+ network, which rivals the performance of Clearwire's WiMax service and comes close to the expected performance of Verizon Wireless 's LTE network, will serve it well for some time to deliver mobile broadband services. But T-Mobile still needs an answer for how it will deliver LTE in the US when it is ready. (See T-Mobile's HSPA+ Rivals Clearwire, US LTE Speeds, T-Mobile HSPA+ Smartphone Due in September , and T-Mobile & LTE.)
Perhaps Sprint would be better off embracing T-Mobile as an investor in Clearwire before the operator lands in the arms of Harbinger Capital Partners LP 's LightSquared LTE network.
— Michelle Donegan, European Editor, Light Reading Mobile