Sprint turns down chance to invest more in Clearwire

Sprint let an investment deadline pass, days after cash-hungry Clearwire's chairman resigned

By , IDG News Service |  Mobile & Wireless

One of Clearwire's biggest challenges is its complicated relationship with Sprint, which owns a majority stake in the company and sells a WiMax service that runs on Clearwire's network, Paolini said. For example, Sprint subscribers with WiMax phones pay a certain amount each month for access to Clearwire's network whether or not they live in a market where it's available. How much of Sprint's revenue should go to the company that supplies its WiMax network has been a matter of contention, Paolini said.

However, the best solution to the company's financial problems may be yet another relationship with a large carrier, such as T-Mobile USA, Paolini said. Teaming up with T-Mobile could provide a major injection of the capital needed to further expand the network, while also drawing in more potential customers through T-Mobile's subscriber relationships and marketing efforts, she said. But making that work while continuing its relationship with Sprint, a direct competitor to T-Mobile, would be even more difficult than the current arrangement.

"It's a huge opportunity, but it's not an easy agreement or business model for anybody involved," Paolini said.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

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