This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Sprint, Clearwire Near WiMax Deal

Sprint (S) and Clearwire (CLWR) are close to announcing the formation of a WiMax joint venture funded in part by a $2 billion injection from Intel (INTC), say people close to the companies.

The deal, which could be announced in the next few days, would create a new company that combines Sprint's licenses in the 2.5-gigahertz wireless spectrum and Clearwire's spectrum in the same and adjoining air waves.

Additional financing is also expected from other firms, say these same sources.

Sprint and Clearwire representatives declined to comment. Intel Capital did not respond to a request for comment.

The two companies revived deal talks , according to press reports, after Sprint tore up a prior agreement in November. That earlier plan had called for Sprint to chip in $2.75 billion toward the expansion of WiMax networks to 19 cities by the end of this year, but the company pulled out of that pact in an effort to undo the work of former CEO Gary Forsee.

Among the top priorities for new CEO Dan Hesse has been deciding the fate of Sprint's costly WiMax effort. Sprint, under Forsee, essentially pinned the company's future on the promising mobile wireless broadband technology. But the $5 billion price tag estimated for the company to build a WiMax network on its own was too much for Sprint as it grapples with the ramifications of its failed merger with Nextel.

Through a joint venture with Clearwire and a big investment from Intel, Sprint can move the expenses off its books and yet still continue to pursue the so-called fourth generation opportunity in selling advanced mobile services.

Intel, meanwhile, benefits because it needs someone to build a national WiMax network so it can sell a bunch of WiMax chips for new devices. Desperation may be starting to take hold as the two largest wireless telcos -- AT&T (T) and Verizon (VZ), have now chosen long-term evolution, or LTE, as the next network upgrade, bypassing WiMax.

For Clearwire's part, the deal would provide an immediate cash bailout as the company faces an eventual funding gap. Clearwire had about $1 billion in cash and investments at the end of the September quarter, but burned through about $400 million in cash to fund operations in that quarter, according to the company's most recent quarterly filing.

Intel Capital holds about a 25% stake in Clearwire. Clearwire founder Craig McCaw is the largest single shareholder, with a majority of the outstanding shares.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs