Sprint will fund Clearwire if necessary, promises 4G smartphone

Sprint Nextel CEO Dan Hesse said that Sprint plans to maintain its majority ownership stake in the WiMAX service provider and, if necessary, it will help fill Clearwire's funding gap. Clearwire plans on covering 80 markets by the end of 2010, but needs around $2.3 billion in new funding to complete its network buildout.

"If the funding is not there, we are clearly willing and able to step up to our fair share of whatever that funding requirement is," Hesse said at the Goldman Sachs Communacopia conference, according to IDG News Service. "Our goal with Clearwire is just that they keep building out that 4G network very, very quickly," he added.

Hesse touted the benefits of Sprint's strategic relationship with Clearwire. Sprint acts as an MVNO of Clearwire's mobile WiMAX network, and sells the service under the Sprint 4G brand. He said that data traffic on Sprint's 3G EV-DO network can be offloaded to Clearwire's network, thus saving Sprint money on capital expenditures in the long run.  

"Once 4G is launched in a market, our capex in that market basically stops," he said.

Earlier this week, Clearwire CEO Bill Morrow said that the company wants to find additional sources of investment by year-end. In an interview with Dow Jones Newswires, he said that new funding likely will not come in the form of a debt offering, but rather through funding from its current investors, which include Google, Intel and Comcast. However, those companies have taken write-downs on their investments in Clearwire as the company's stock tumbled to less than $3 per share earlier this year. Clearwire is currently trading back up above $9 per share.

As for Sprint's 4G plans, the carrier is planning to ship a 4G smartphone next year, according to a PC World article. The phone will support WiMAX and 3G, and will look for a 4G network first before bumping down to 3G speeds. Todd Rowley, vice president of Sprint's 4G/WiMAX business unit, said the company is in talks with an unnamed handset maker to produce the phone, but likely will not launch the gadget until Clearwire can reach 100 million potential subscribers--which might not happen until late 2010.

For more:
- see this IDG News Service article [1]
- see this Kansas City Business Journal article [2]
- see this PC World article [3]

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Sprint touts 4G's 'halo effect' on mobile data services [4]
Morrow stresses Clear's open architecture, vendor-agnostic network [5]
Clearwire CEO: 'We're in the sweet spot [6]
Clearwire to launch 25 markets by year-end [7]
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