Sprint in talks to buy Clearwire; deal seen as helpful for carrier's LTE plans
The wheeling and dealing in the cell phone industry appears far from over. A report by Bloomberg says that Sprint is in early talks with Clearwire with two possible outcomes. The nation's third largest carrier could add to its 54% majority ownership in the network operator, or buy out the entire company. According to the report, Sprint has been talking with other companies like Comcast about investing in a deal to buy Clearwire, a move which would help the carrier build out an LTE network to help it compete with similar offerings from Verizon and AT&T. According to sources who wished to remain anonymous, Sprint and Comcast are seeking ways to fund the building of the 4G pipeline.
Clearwire currently provides the WiMax 4G service for Sprint's 4G enabled handsets and says it needs $600 million to build out an LTE network alongside WiMax. As we reported, back in July, Sprint reached a deal with wholesale pipeline provider LightSquared in which the latter agreed to pay Sprint $9 billion and give the carrier service credits over a 15 year period in exchange for the right to use Sprint's infrastructure to build an LTE network.
source: Bloomberg via BGR
While Sprint already owns a majority of Clearwire, Comcast and Time Warner cable are minority investors in the company which has been operating in the red. Rumors of a deal pushed Clearwire's stock up 30% on Friday to $3.01, the biggest one-day gain for the stock since July 2007. Despite Friday's gain, the stock is still down 42% so far this year.
source: Bloomberg via BGR
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