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Clearwire announced it has finalized a funding and resale agreement with Sprint Nextel worth up to $1.6 billion to keep the company afloat, and made good on a $237 million interest payment due today.

Terms of the agreement with Sprint include:

  • Offers Clearwire Up to $1.6 Billion in Conditional Aggregate Revenues and Funding
  • Clearwire to Receive Total of $926 Million From Sprint for Unlimited 4G WiMAX Services in 2012 and 2013; WiMAX Network to Operate Through at Least 2015
  • Sprint to Provide Support for Future LTE Services
  • Companies Agree on Parameters for Additional Sprint Equity Investment

The new Sprint-Clearwire deal includes $926 million in payments Sprint will make for unlimited 4G WiMax services as well as possible prepayment for LTE services and, potentially, additional equity investment in Clearwire.

Shares of Clearwire rose 31% to $2.34 as the company also reported it has made interest payments totaling $237 million on notes due Thursday.

Under the agreement, Sprint will pay a $350 million prepayment, provided Clearwire meets certain objectives by June 2013. According to Clearwire CEO Erik Prusch Clearwire expects to complete the first phase of the LTE overlay by the end of 2012.

Clearwire’s interim CEO, John Stanton, said the company will NOT use Sprint’s Network Vision architecture on its existing network, in order to save money, but is talking with Sprint to use it to deploy LTE in markets in which it has not yet deployed service.

Currently, the vendors who supply WiMAX basestations for Clearwire include Motorola, Samsung, and Huawei. A card swap with software makes upgrading the Samsung and Huawei basestations easy.

Sprint’s Network Vision architecture will be supplied by Ericsson, Alcatel-Lucent, and Samsung, which will replace their CDMA and iDEN gear with new frequency-and radio-agnostic equipment. It will likely feature both WiMAX and LTE-Advanced on their 2.6 GHz spectrum.

Plain vanilla LTE and WiMAX are often called “4G”, but they are not “official” 4G standards, according to a strict definition by the ITU.

Summary of IMT-Advanced

Characteristics Technology
Deployment 2012-2015
Core networks IP based
Band Below 6GHz
Data rates 100 Mbps to 1 GHz
Access methods OFDMA, SC- FDMA, OFDM-TDMA
Radio Interface Cognitive radios, software defined radios.
Modulation QPSK, 16QAM, 64QAM, DAPSK
Services provided Rich multimedia, voice, high speed data.
Duplex methods FDD(paired, unpaired), TDD
Error control LDPC, turbo codes, HARQ
Handover Seamless, vertical, horizontal, hard, soft

The ITU requires 100 Mbps (mobile) and 1 Gbps (fixed) speeds, among other criteria, to qualify as true “4G”. That’s about 3 times the speed of today’s LTE and WiMAX systems.

Related Dailywireless articles include; Clearwire: Dead or Alive?, Sprint’s Network Vision Detailed, Clearwire Chooses LTE Advanced, China Mobile + Clearwire + Apple?, Will Sprint Go TD-LTE?, WiMAX to TD-LTE: Everybody’s Doin’ It, Speculation on Sprint Infrastructure, China Mobile Talks Up TD-LTE iPhone, World’s First TD-LTE Service Launched by Mobily

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