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Don’t hold your breath for a deal between Sprint Nextel and Clearwire.
With Sprint getting taken over by Japanese wireless carrier SoftBank, many believed Sprint would take full ownership of Clearwire, which provides 4G services to carriers and consumers in select markets. In addition to being Clearwire’s largest customer, Sprint is the largest shareholder too, although it doesn’t have control of the board.
Leading up to the announcement of the Sprint-SoftBank deal, there were various reports that Clearwire was a sticking point in the merger talks, and that SoftBank wanted Clearwire scooped up. But yesterday’s deal explicitly noted that Sprint is under no obligation to strike any deal with Clearwire beyond their current existing agreement.
But Sprint has no immediate plans to buy Clearwire, according to Reuters, which cited anonymous sources. With Sprint now in the middle of a complicated transaction that will take several months to get completed, the company isn’t going to further tangle itself up with another deal.
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That’s likely a disappointment to investors, particularly Clearwire shareholders that bid the stock up 16 percent yesterday. The stock is down 17 percent to $2.23 in pre-market trading today.
Given the tight relationship between Sprint and Clearwire, a deal has made sense for a long time. Clearwire acts as a wholesaler for its 4G WiMax service, but Sprint has made up most of its business. Sprint has largely abandoned WiMax in favor of its own in-house LTE network, although it still sells prepaid phones using that network.
In addition, Clearwire is building out a 4G LTE but using a variant called TD-LTE, which is different from what Sprint, AT&T, or Verizon Wireless is using, but compatible with the TD-LTE network that SoftBank is building.
The SoftBank deal provides $8 billion in additional capital to Sprint, which is expected to accelerate its network improvement project and improve service quality. SoftBank CEO Masayoshi Son said on the call yesterday that he has no plans for a deal with Clearwire.
Clearwire declined to comment. CNET contacted Sprint for comment, and we’ll update the story when the company responds.
Updated at 6:07 a.m. PT: to include a response from Clearwire.
