T-Mobile Pitching Investment In Sprint Clearwire - InformationWeek
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9/1/2010
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T-Mobile Pitching Investment In Sprint Clearwire

Deal would help Sprint get funding to complete its WiMax rollout, and give T-Mobile a foothold in the 4G wireless market.




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Under pressure from stockholders to improve their financial performance, Sprint Nextel and T-Mobile USA -- the third and fourth largest U.S. mobile phone carriers, respectively -- are reported to be discussing the possibility of T-Mobile investing in Sprint's Clearwire operation.

The Wall Street Journal reported Wednesday that Sprint's directors are debating allowing T-Mobile to invest in its Clearwire unit, which needs additional financing to complete the nationwide rollout of its 4G WiMax network. With a 54% ownership stake, Sprint controls Clearwire.

While both Sprint/Clearwire and T-Mobile currently have strong, new networks, they are likely to be overshadowed in the coming months by Verizon Wireless' long-term evolution network, which is scheduled to debut by the end of this year. AT&T plans to follow with its own LTE network next year.

An investment in Clearwire by T-Mobile could involve the Deutsche Telekom unit in Clearwire's TD-LTE trials planned for Arizona later this year. Fueling the push for all carriers to get on the LTE bandwagon is a new report from the Global Mobile Suppliers Association, which shows a more than 70% jump in six months in the number of carriers committing to LTE.

In the meantime, Sprint/Clearwire and T-Mobile are touting their networks' robustness. Clearwire's WiMax network -- already up and running in several dozen U.S. cities – is well-established and popular with users while T-Mobile's HSPA+ overlay is being touted by the company as being as good or better than the Sprint 4G offering.

In spite of their robustness and popularity, Clearwire's WiMax and T-Mobile's HSPA+ are increasingly looking like interim networks as the mobile world marches to LTE.

The Wall Street Journal report noted that there are differences among Sprint's directors on doing a T-Mobile deal. Earlier this year, T-Mobile Deutschland explored the possibility of spinning off T-Mobile USA in an initial public offering or an acquisition, but neither approach got any traction at the time.

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