Sprint Clearwire Resignations May Open LTE Door for T-Mobile

When three top executives from Sprint Nextel, including CEO Dan Hesse, resigned from the board of directors of 4G provider Clearwire, Inc. the official reason was changes in the anti-trust laws regarding interlocking boards of directors.

But there’s every likelihood that the real reason was money. Clearwire needs more money to continue building out its 4G network, and a major source of such money is Germany’s Deutsche Telekom and its U.S. arm, T-Mobile USA.  

While T-Mobile may be the smallest of the national wireless carriers, it’s really part of the largest global wireless company. Deutsche Telekom is ubiquitous globally, and when its parts are added up, it’s much larger than the U.S. competition. In addition, it has plenty of money to fund investments in Clearwire and its Clear 4G wireless service. 

The biggest hold-up in the past is that Sprint Nextel holds 54 percent of Clearwire’s stock and seven seats on its board of directors. There has been strong opposition to allowing the T-Mobile investment by a few of the Sprint executives on Clearwire’s board. 

Now that the opposition has departed the board, there’s one other annoying little problem. Clearwire’s current service is WiMax. T-Mobile has already said that it has no intention to adopt WiMax as a 4G technology, pointing out that its HSPA+ technology provides far greater bandwidths and is capable of much higher speeds than WiMax. In its current implementation, T-Mobile’s HSPA+ is two to three times faster than Sprint’s 4G. 

But there’s more to Clearwire than WiMax, and there’s more to T-Mobile than HSPA+. Clearwire is already testing a very high-speed version of LTE in Phoenix, Arizona. It’s the only existing version of the LTE technology that’s as fast or faster than T-Mobile’s 3G. T-Mobile, meanwhile, has said that its next step is LTE, but the company isn’t currently testing that technology in the U.S.  Furthermore to make LTE fast enough to meet T-Mobile’s demands, it needs more nationwide spectrum. Clearwire has that. 

In fact, Clearwire has what can only be described as vast spectrum holdings, of which WiMax needs only a relatively small portion. Another avenue for raising money would be to simply sell some of that spectrum to T-Mobile, which could combine it with its existing spectrum holdings to field a national LTE presence much greater than it can now. 

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