Sprint Gets Majority Control over Clearwire

Posted by Sam Churchill on

Sprint Nextel has acquired a majority interest in Clearwire by buying a stake from the company’s founder, reports Reuters. In total, Sprint said it would pay $100 million for the acquisition, all from working capital.

Up to now, Sprint held 48.1 percent voting power, giving it substantial control but not enough for it to solely determine Clearwire’s future. Craig McCaw’s Eagle River Holdings has 2.3 percent voting power, and its chief executive, Craig McCaw, owns another 2.3 percent.

Sprint reached the deal on Wednesday and now controls a 50.8 percent stake in Clearwire, it said in a securities filing on Thursday. The new arrangement appears to have dashed hopes that Sprint would buy Clearwire outright.

The Clearwire deal comes less than a week after Sprint agreed to sell 70 percent of itself to Japan’s Softbank in a $20 billion transaction. FBR Capital Markets, in a note to clients on Thursday, said the deal eliminated a major risk for Sprint, which can now control Clearwire’s valuable spectrum assets and have unfettered access to them. Sprint and Softbank now have the power to say no to Clearwire raising money by selling off their spectrum – especially to AT&T.

AT&T is urging regulators to take a close look at Sprint’s deal with Softbank and Clearwire. Brad Burns, an AT&T vice president, said in a statement:

“Softbank’s acquisition of Sprint and the control it gains over Clearwire will give one of Japan’s largest wireless companies control of significantly more U.S. wireless spectrum than any other company. We expect that fact and others will be fully explored in the regulatory review process.”

Clearwire has around 120 MHz of spectrum in many markets across the United States and Clearwire plans to use carrier aggregation to meld together Clearwire’s TD-LTE network with Sprint’s FD-LTE in the PCS band into 40 MHz-wide channels.

Of the 300 operators who have TDD spectrum resources, 66% own 2.3GHz and 2.6GHz bands, according to ZTE.

While the propagation at 2.6 GHz is poor, the 2.6 GHz band is one of the few that is globally allocated for 4G LTE, providing improved device standardization and global roaming.

Some analysts believe Softbank is likely to pursue a “hot zone” approach using small “het nets”, combining WiFi with 2.6 GHz microcells, as well as integrating 2.6 GHz radios onto macro cell sites using Sprint’s “Network Vision” architecture.

One strategy might have Sprint/Clearwire install 5,000-8,000 TD-LTE macro sites, while Softbank fills in neighborhood hot zones with micro sites.

AT&T is under so much pressure to add wireless spectrum that it may be compelled to pay the highest premium in more than a decade to secure Dish Network, reports Bloomberg.

Dish’s spectrum will be worth about $9.4 billion if it wins approval from the FCC for terrestrial mobile- phone service, according to John Hodulik, a UBS AG analyst in New York. Dish Chairman Charlie Ergen has said that the company is planning to start its own wireless service and expects FCC approval in March.

If Dish’s 40 MHz of spectrum is worth the same $0.69 price per MHz-POP that Verizon paid for AWS spectrum (in the SpectrumCo deal), then the Dish spectrum might be valued at $8.6 billion, estimates Credit Suisse analyst Jonathan Chaplin.

It may be in the interest of both Dish Networks, Sprint/Softbank, and Clear to force AT&T into a mobile virtual operator position. In that arrangement, AT&T might lease capacity to provide their own labeled WiFi/2.6 GHz service.

Tablet makers, content and ad networks might roll their own with Softbank’s help.

Related Dailywireless articles include; Sprint Won’t Buy Clear – For Now, Softbank & Sprint Do a Deal, Sprint & Softbank Discuss Merger, Japan & Korea: More LTE than USA , Intelligence Committee: Huawei & ZTE Security Threats , Dish Planning Internet-based TV Service?, Clearwire: On the Hot Zone , Japan and S Korea Report Big LTE Growth, SK Telecom Introduces Voice over LTE

Posted by Sam Churchill on Thursday, October 18th, 2012 at 8:18 am .

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