Sprint's Hesse commits to Clearwire, hints at new 4G pricing scenarios

Sprint Nextel CEO Dan Hesse said he plans to maintain the carrier's position as a majority owner of WiMAX operator Clearwire, and also indicated the introduction of 4G technology could change the way carriers bill for wireless services.

Hesse, speaking yesterday at the UBS Global Media and Communications conference in New York City, said in a wide-ranging interview that he could not foresee a scenario in which Sprint takes a smaller role in Clearwire than it has now. Sprint, which has about a 55 percent stake in Clearwire, provided $1.176 billion in new equity financing to the company last month.

"I would find it hard for me to imagine a situation where we would let our ownership go below 50 percent," he said.  However, he dodged a question about whether Sprint would purchase the rest of Clearwire at some point in the future. "I'm not supposed to answer that," he said. Google, Time Warner Cable, Comcast and others also are investors in Clearwire.

Hesse also said wireless pricing plans may shift from a focus on voice minutes to gigabytes of data usage, reflecting the industry's evolution to 4G networks and non-traditional wireless devices. As market dynamics shift, he said, Sprint would be able to handle the changes.

"We want to have the flexibility--in wholesale and retail, prepaid and postpaid, with multiple brands--to move and morph, because business models are going to change," he said. "The biggest growth will come from non-traditional wireless devices."

Sprint, which has struggled to stop postpaid subscriber losses even as as its prepaid business has boomed, is taking the right approach to its postpaid pricing, he said. "We think it's where it needs to be based on profitability, and where we think we should be in the market," he said. "We will continue to watch it over time, and if it's not effective we can change it."

For more:
- see this Dow Jones Newswires article (sub. req.)
- see this Reuters article
- see this Telephony article
- see this Unstrung article
- see this Reuters article

Related Articles:
UPDATED: Clearwire confirms $1.5B in new funding
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Sprint's plan of attack
Sprint's Hesse discusses the carrier's growth plan
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