Sprint Buying Clearwire?

Posted by Sam Churchill on

Sprint and Clearwire are moving closer to a deal under which Sprint would acquire the roughly 49 percent of the company it doesn’t already own, reports CNBC. Clearwire Chairman John Stanton declined to comment on the deal, after a Seattle CityClub luncheon where he was speaking today.

Given the complexity of the relationship between the two companies, and its ownership structure — not to mention Sprint’s pending deal to sell a majority stake to SoftBank — sources cautioned CNBC that a Clearwire acquisition is still fraught with difficulty.

In recent days Sprint has apparently had conversations with a number of Clearwire’s big shareholders, which include Bright House, Intel and Comcast, aimed at purchasing their stock at roughly $3.00 a share, according to people familiar with the conversations. Clearwire shares were up 14.2 percent at $2.74 in afternoon trading.

According to the latest regulatory filings, Comcast has 6 percent of Clearwire’s voting shares, while Intel has 6.4 percent and Bright House has 0.6 percent. Sprint recently increased its ownership of Clearwire to 50.45 percent

Clearwire and Softbank will likely need 40-60 MHz for macro and small cell build out at 2.6 GHz — that leaves some 40-60 MHz that could be put on the market.

The price that Sprint would offer for the 488 million shares that are held by the public remains unclear, and while a special committee of Clearwire’s directors might agree to a similar price, it remains to be seen whether a tender at that price would succeed, according to CNBC.

Clearwire and its spectrum would be a bargain if bought out at its market value of $1.8 billion, but the company is also carrying quite a bit of debt, north of $4 billion. Sprint and Clearwire may have a total of some 120 Mhz available in urban areas, but each entity controls about half of the total spectrum available.

In October Sprint increased its ownership in Clearwire from 48 percent to 50.8 percent by purchasing about $100 million worth of Clearwire stock from Eagle River Holdings, the investment firm owned by wireless pioneer Craig McCaw.

Sprint needs the consent of SoftBank to buy Clearwire and any deal between Sprint and Clearwire will need to be conditional to the closing of the Softbank deal.

With virtually the entire 190 MHz-wide, 2.6GHz band owned by one entity, coordinating spectrum might be easier.

China Mobile, Clearwire, and Softbank would use all of the 2.6 GHz band for TD-LTE. The Global TD-LTE Initiative (GTI) announced that China Mobile, the world’s largest mobile network, Softbank Japan, the largest current TD-LTE provider, and Clearwire, the major proponent of TD-LTE in the United States, are working together to devote nearly the entire 200 MHz band to TD-LTE (band 41), and to make their infrastructure and consumer equipment interoperable and compatible.

Qualcomm LTE chipsets supporting the Band 41 in combination with other LTE FDD/TDD bands will be available soon. Leading TDD operators, include China Mobile, India’s Bharti Airtel, South Korea’s KT, Japan’s SoftBank, the US ClearWire, UK Broadband and P1.

Several countries in Europe, such as the UK, plan to auction the 2.6 GHz spectrum early next year. They are likely to go ahead with a shared TD/FD approach, formulated several years ago at the ITU’s World Telecommunications Forum. Favored by the big telcos, that approach would devote 140 MHz out of the total 190 Mhz to paired frequencies. That’s handy for [virtually non-existent] voice traffic.

A proposal to allow Dish Network to offer mobile-phone service has enough votes to pass this week, according to FCC staff members. In 2008, Dish acquired a 40 GHz spectrum for $3 billion from bankrupt satellite companies ICO and TerraStar.

UPDATE: The FCC proposal to regulate Dish’s airwaves, cleared the commission on a 5-0 vote, according to a statement e-mailed today by Justin Cole, an agency spokesman, reports Bloomberg.

“No matter how you slice it, this is a transformative outcome for Dish to expand beyond its pay-TV business,” Paul Gallant, Washington-based managing director at Guggenheim Securities, said in an interview. “Even if Dish loses the spectrum interference battle it’s been fighting, it still got most of what it wanted from the FCC.”

But if Softband/Sprint do a Dish deal, they may want to sell 40 MHz of Clearwire spectrum to AT&T to avoid a fight with the Federal Trade Commission. By owning the entire band Sprint/Softband would have flexibility to carve up parts of Clear’s spectrum for re-sale.

Perhaps the Dish initiative would be largely funded by Google. That would give Sprint/Softbank FD-LTE in the 2GHz band and TD-LTE in the 2.6 GHz band. It’s just idle speculation, of course. Some sort of move by Softbank, Clearwire, Dish, and AT&T does seem inevitable – and likely to be announced soon.

It would likely reshape the landscape of broadband wireless in the United States.

Related Dailywireless articles include; Sprint + Dish?, Sprint Gets Majority Control over Clearwire, Sprint Won’t Buy Clear – For Now, Clearwire Cuts TD-LTE Deployment, China Mobile: Go For TD-LTE Launch, Dish: On the Move , Dish and Sprint Battle over PCS band Extension, Dish CEO: T-Mobile Partnership?, Clearwire: On the Hot Zone, Clearwire Cuts TD-LTE Deployment, South Korea Completes Nationwide LTE Coverage, Brazilian 4G Auction Raises $1.3B, Huawei LTE 4×4: Goes to 250 Mbps, Clearwire and China Mobile Announce TD-LTE Testing Plan,

Posted by Sam Churchill on Tuesday, December 11th, 2012 at 11:54 am .

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