A Delaware court is allowing Sprint affiliate iPCS, the operator's larger affiliate, to move ahead with its legal action against Sprint and its planned WiMAX joint venture with Clearwire. However, the court won't allow two other iPCS subsidiaries, Horizon PCS and Bright PCS, to joint the legal action.
iPCS has the exclusive rights to sell Sprint Nextel branded services in 80 markets, and in March iPCS and its subsidiaries filed a complaint against Sprint, claiming its WiMAX deal with Clearwire would breach the exclusivity provisions of IPCS' affiliate agreements with Sprint. iPCS wants a declaratory judgment against Sprint that a merger with Clearwire would in fact breach its affiliate agreements with Sprint. Moreover, the affiliate wants a permanent injunction against the merger until its affiliate agreements have been modified with Sprint.
It looks like it's deja vu all over again for Sprint, which had similar battles with affiliates over its merger with Nextel. It ended up coughing up millions to purchase these companies in 2005 so it could consummate its merger with Nextel. Fortunately for Sprint this time around, there aren't many of them left.
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