Sprint Nextel (NYSE:S) and Clearwire (NASDAQ:CLWR) are working out the details of a new contract that would extend their existing wholesale deal for another three to five years, according to a report in Bloomberg, citing three unnamed sources who are said to have direct knowledge of the deal.
The contract will allow Sprint to use Clearwire's network to provide service to its customers after the current deal expires at the end of 2012. Although the details aren't final, the report said that the price Sprint will pay for Clearwire to handle its traffic is likely to fall.
A new wholesale deal with Sprint would provide a much needed boost for Clearwire, which has said it needs about $1 billion in additional financing to deploy LTE and finance its existing WiMAX operations. However, according to the sources, Sprint won't provide financing to Clearwire as part of the new deal.
Sprint announced Oct. 7 that it will launch LTE service by mid-2012 using its 1900 MHz spectrum and move away from WiMAX as its 4G technology of choice. In addition, the company said during its earnings call earlier this week that it had signed an agreement with Clearwire that essentially will allow the companies to work together toward a joint LTE network.
The agreement covers cell site selection, site builds, chipsets for devices and is intended to assure seamless handoffs between Sprint's network and Clearwire's LTE network.
- see this Bloomberg article
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