The past few weeks have been a little uncertain for Clearwire. From their possible skip on a huge debt to losing 3 resellers, the industry was worried that it would lose a big player in the wireless game. Never fear, though, because Sprint is here to save the day. The company announced this week that there may be up to $1.6 billion in payments to Clearwire for their WiMax and future LTE services.
These modified agreements were made in what seems to be Clear's last hour of life, but was also put together to meet Sprint's growing 4G needs, as it gives Sprint unlimited access to the network.
Sprint will shell out $926 million to Clearwire, with two-thirds of it going into the bank in 2012, in order to have unlimited WiMax access from 2012 to 2013. Based on Sprint's previous announcement of backing away from Clear in the future, the agreement was also made to allow Sprint a discounted rate through at least 2015. Sprint has said they plan to support WiMax devices from 2012 through each entire two-year contract, so having access to the network until 2015 gives them some wiggle room on when they decide to turn off the 4G WiMax access.
There is another side to this deal, too. Clearwire still has a plan to move forward in their 4G evolution with a future "4G LTE Advanced-ready overlay network," which would be steps ahead of Verizon's current 4G LTE network in terms of speed and coverage. The deal gives Sprint access to the additional network when it wants it and Sprint will pay Clearwire up to $350 million in several payments for two years, but only if Clear meets certain deadlines and target goals by June of 2013.
It's interesting to see the two pairing up for a future LTE deal, especially after Sprint's remarks, but I suppose money does change things, specifically when Sprint now will be ensuring Clear's existence. The two companies will work together to deploy LTE macro-cell sites in Sprint high usage areas.
Erik Prusch, president and CEO of Clearwire, comments on the deal:
Today's announcement further cements the mutually beneficial relationship between our two companies. It is an important step toward meeting Clearwire's key goals of extending our current 4G network arrangement, securing a commitment to our future LTE Advanced-ready network, and funding the business. We continue to move closer to realizing the full value of our deep spectrum resources as we are uniquely positioned to meet the rapidly growing demand for 4G mobile broadband.
In the end, Clearwire seems to have changed its tone about the state of their company in the coming year. $1 billion helps that. The good news is that Sprint has the same partner it had for WiMax for future LTE rollouts, which is pretty exciting. Sprint has said that it will be launching aircards and phones for the 4G LTE Advanced network in 2013.