Clearwire doesn't need Sprint's OK for a T-Mobile deal

Despite a recent report that indicated Sprint Nextel's (NYSE:S) board is debating whether to allow T-Mobile USA to invest in Clearwire (NASDAQ:CLWR), ultimately Sprint does not have final say in the matter.

A report in the Wall Street Journal said Sprint's board is divided on the issue. However, while Sprint owns 54 percent of Clearwire's outstanding shares, and can appoint seven of the company's 13 board members, major decisions like allowing another strategic investor require the approval of 10 board members. So, in theory, while Sprint holds sway on Clearwire's board, it is not the ultimate authority.

T-Mobile has not submitted a formal proposal, so no decision is imminent, the WSJ report said. T-Mobile USA CEO Robert Dotson confirmed in March that that the nation's No. 4 carrier has talked with Clearwire and various cable companies about a possible joint venture to enhance T-Mobile's spectrum position. Clearwire CEO Bill Morrow has said the company is interested in making T-Mobile USA a wholesale customer on its network.

Furthermore, Morrow has indicated that a decision about partnering with a company like T-Mobile is ultimately in Clearwire's hands. "Let's just say, the largest arch enemy of our top shareholder [Sprint] kind of came in and said we're going to offer you great economic terms, I think the reality is, is if that made sense to us, we'd still get that approved," Morrow said during the company's second-quarter earnings conference call. "We'd naturally take into account all actions or what would affect us from a value standpoint."

Sprint does have some control in determining Clearwire's financial position though. If Sprint decides to pour more money into the company, that could dilute the influence and power of other shareholders. Clearwire is speeding toward 80 mobile WiMAX market launches by year-end, but will likely need more investment to continue its network expansion.

For more:
- see this mocoNews article

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