Report: Sprint conflicted about T-Mobile investing in Clearwire

Sprint Nextel's (NYSE:S) board is grappling with whether to allow rival T-Mobile USA to invest in Clearwire (NASDAQ:CLWR), which will need more money to continue its network buildout, according to a report in the Wall Street Journal

The report, citing three unnamed sources familiar with the matter, said T-Mobile has not submitted a formal proposal, so no decision is imminent. Further, the report said, some Sprint board members are strongly opposed to such a move. Sprint holds a 54 percent stake in Clearwire and also serves as a wholesale partner of the company, reselling Clearwire's mobile WiMAX service under its Sprint 4G brand.

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 said the company is interested in making T-Mobile USA a wholesale customer on its network.

Representatives from Sprint, Clearwire and T-Mobile declined to comment.

Clearwire, which is scheduled to test LTE network technology this fall, is busy expanding its network: The company expects to have 80 mobile WiMAX markets up and running by year-end. Indeed, the company today announced it launched service in Boston, Providence, Rhode Island, and Daytona Beach, Fla., actions that bring WiMAX to 52 markets covering 60 million people.

T-Mobile, meanwhile, is forging ahead with its HSPA+ network buildout. The company said it plans to offer HSPA+ with theoretical peak speeds of 42 Mbps in 2011. However, T-Mobile does not have the kind of spectrum holdings Clearwire owns, and does not hold 700 MHz spectrum like Verizon Wireless (NYSE:VZ) and and AT&T Mobility (NYSE:T). (Verizon and AT&T plan to launch LTE in their 700 MHz holdings.)

"T-Mobile would love to be in," one source told the Journal. But does Sprint "want to help them that much?" the person said. "And at what price?"

T-Mobile does not yet need additional spectrum but is "actively exploring a variety of options that would provide" it, T-Mobile spokesman Reid Walker told the Journal. One possible option for T-Mobile besides a partnership with Clearwire is to become a wholesale customer of LightSquared, which is building a hybrid satellite-terrestrial LTE network.

For more:
- see this WSJ article (sub. req.)
- see these three releases about Clearwire's buildout

Related Articles:
Sprint's 4G chief stands behind WiMAX despite LTE rumblings
Sprint may add LTE to 4G arsenal
Clearwire raises $291M in rights offering
A Clearwire LTE switch won't bring wireless harmony overnight
Clearwire to begin testing LTE, promises speeds of 20-70 Mbps


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