The Money Has to Come from Somewhere

By Wayne Rash  |  Posted 2010-10-13 Print this article Print


After all, T-Mobile USA doesn't have an immediate upgrade path to 4G. Buying into Clearwire would give T-Mobile access to the LTE technology that is already being tested in the Phoenix area. T-Mobile probably isn't interested in the WiMax technology that Sprint is using, but LTE would allow it to leverage its LTE experience elsewhere and get 4G rolling much faster in the United States.

In other words, Sprint would have a competitor as a co-owner of its 4G network provider, using a competing technology that Sprint also would like to use eventually. For T-Mobile, this is an opportunity to get 4G rolling fast. For Sprint, it's a nightmare. So there should be no surprise that it wants Clearwire to do anything it can to avoid a DT investment. The question is whether this ploy will work.

Right now, nobody is discussing the status of the bidding. A Clearwire spokesperson told eWEEK that the company doesn't comment on speculation and rumors. A spokesperson for Sprint had a similar comment. The Clearwire spokesperson also enjoyed a hearty laugh at the question and promised to let us (and you) know when something happened. Again, that's no surprise since auctions and other negotiations like this are touchy subjects and this whole situation is nothing if not touchy.

However it's also apparent that DT hasn't been told to go away. That offer is still on the table, and as much as Sprint would hate to see it happen, it might be Clearwire's only sure path to financial stability. While it might seem that as a majority owner, Sprint could prevent such a buy-in by DT, the fact is that it can't, or at least won't.

Sprint has the opportunity to provide more funding for Clearwire, but so far hasn't chosen to do so. It makes even less sense for Sprint to buy back some of the spectrum that it provided to Clearwire in the first place because that would be even less efficient than simply providing money.

So the bottom line must be that Sprint wants Clearwire to get money from somewhere, but it wants it to be expensive for the company that provides the money either for spectrum or as an investment because that helps Clearwire's-and thus Sprint's-bottom line. In the long run, Sprint may hate T-Mobile less than it hates the idea of Clearwire running out of money and not being able to build its 4G network in a timely manner. Besides, there's still that rumor that DT is planning to buy Sprint, so maybe it wouldn't pay to be too difficult with the future owners.

Wayne Rash Wayne Rash is a Senior Analyst for eWEEK Labs and runs the magazineÔÇÖs Washington Bureau. Prior to joining eWEEK as a Senior Writer on wireless technology, he was a Senior Contributing Editor and previously a Senior Analyst in the InfoWorld Test Center. He was also a reviewer for Federal Computer Week and Information Security Magazine. Previously, he ran the reviews and events departments at CMP's InternetWeek.

He is a retired naval officer, a former principal at American Management Systems and a long-time columnist for Byte Magazine. He is a regular contributor to Plane & Pilot Magazine and The Washington Post.

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