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Sprint Has Backup Plan in Clearwire Dispute

Clearwire has a big incentive to resolve its wholesale pricing dispute with Sprint Nextel. 

Sprint CEO Dan Hesse told the Wall Street Journal his company expects to resolve its dispute with Clearwire, but indicated Sprint is prepared to walk away from the relationship if the companies cant settle differences over the price Clearwire charges Sprint to use its wireless network.

Our Plan A is together with Clearwire, but we do have a Plan B,” Hesse is quoted as saying. If we dont reach agreement, we will go and do our own thing.”

In its fourth-quarter earnings last month, Clearwire disclosed that it was close to resolving its dispute with its partner and investor Sprint.

Backed by some of the biggest names in the U.S. communications and technology fields, Clearwire continues to seek out additional funding as it builds out a nationwide 4G network that is based on WiMAX technology.

The company stated last month it is examining a number of funding and other strategic alternatives, including potential strategic transactions, additional debt or equity financings and/or asset sales.”

But Hesse says Sprint has made it clear the company wont invest further in Clearwire until the wholesale pricing dispute is settled.

In November 2008, Clearwire and Sprint announced completing a transaction to combine their next-generation wireless Internet businesses.  At the time, Clearwire also disclosed that Comcast, Intel, Time Warner Cable, Google and Bright House Networks had invested $3.2 billion in the company.

As of Dec. 31, 2010, Sprint owned a 54 percent economic interest in Clearwire.


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