The Wall Street Journal reported early Thursday that Clearwire will eliminate its retail strategy with Clear to focus on its wholesale business as the company's funding dries up. This is a move that Sprint has been pressuring the company (which it is majority owner of) to make as it opted out of Clearwire's last round of funding.
If it proves true, it will be the best strategy for Clearwire, according to Mizuhu Security Analyst Michael Nelson. He wrote in a research note on the speculation:
We believe Clearwire's shift away from retail likely indicates the two companies are working closer together towards a singular goal and may increase the potential for Sprint to invest additional capital in Clearwire. We continue to expect Sprint to invest additional capital in Clearwire once the companies resolve their dispute over wholesale contract payments and agree regarding usage of cash, which we believe is closer if Clearwire agrees to abandon its retail strategy.
Sprint, meanwhile, remained aloof about the possibilities on its fourth-quarter earnings call Thursday morning.
"We have good discussions and negotiations going on with Clearwire about resolving the differences in view between the companies," Sprint CEO Dan Hesse said on a call with investors. He acknowledged that this includes the "very public" issue of wholesale rates and wholesale pricing, but added "I wouldn't read anything more into that with respect to funding."
"We're not at that point where we've made any decisions in that regard moving forward," Hesse said. "We're pleased Clearwire was able to secure additional funding in the fourth quarter. If they need more, that will be a bridge we cross at that time." The carrier is still in the process of determining what to do for 4G deployments, Hesse added, and part of that is looking at WiMax versus Long Term Evolution (LTE). With its Network Vision program, Sprint has the ability and capability, as well as the spectrum, to do LTE should it decide to do so, he said. (See Sprint Ready to Leapfrog to Multi-Mode.) Sprint's Fourth Quarter
Sprint still rounded out 2010 with a subscriber loss, but it added 1.1 million total subscribers in the fourth quarter, including 58,000 postpaid users. That's the first time in over four years Sprint has had positive growth in postpaid. It expects to be net-add positive on postpaid this year, and Hesse says it's counting on a commitment to simplicity and value, a strong device lineup and continued improvements in customer experience to strengthen the brand.
"Today's a big well-known new device launch with a competitor, and we have actions in place to respond and mitigate that impact," Hesse said, alluding, of course, to the iPhone launch on Verizon Wireless , but not outlining what those actions will be. He admitted that he does expect some impact from Verizon's iPhone, but said Sprint's doing what it can to keep its subs in place.
— Sarah Reedy, Senior Reporter, Light Reading Mobile