One thing you can say about having Sprint as a majority investor: It’s not boring.
Shares of Kirkland, WA-based Clearwire (NASDAQ: [[ticker:CLWR]]) bounced up today after the third-quarter earnings report from Sprint (NYSE: [[ticker:S]]), particularly CEO Dan Hesse’s comments about a possible deal for Clearwire’s as-yet-unbuilt long-term evolution network.
As quoted by Forbes’ Eric Savitz, Hesse said that Sprint has “signed a nonbinding cooperation agreement with Clearwire, to work together on the technical specifications of the Clearwire LTE network and to ensure a superb customer experience for Sprint customers on the Clearwire LTE network.” That kind of agreement is needed to pave the way for any broader deal to buy LTE service from Clearwire, Hesse added.
As Bloomberg reports, any Sprint deal to use Clearwire’s LTE network wouldn’t be in the picture until 2013. Clearwire still needs to actually build an LTE-based network—its fourth-generation infrastructure is currently based on a different kind of technology, called WiMax. It could cost Clearwire around $900 million to make the switch, but Sprint apparently isn’t ponying up cash for that effort yet.
This may all sound like pretty minor stuff, given all the tentative deals and possible partnerships and no commitments of money. But given Clearwire’s money-losing financial performance and the recent buffeting it’s taken on Wall Street, any appearance of a lifeline from its patrons at Sprint makes for big news.
It was only a couple of weeks ago that another round of Sprint statements sent Clearwire stock tanking. At that time, Sprint was rolling out its own Clearwire-free plans for an LTE 4G network, and Hesse pointedly said that he had nothing to announce beyond 2012 regarding Clearwire. Pressed by investors in that previous call, Hesse basically said that a bankruptcy by Clearwire wouldn’t be that bad.
Clearwire responded to that beating by pre-reporting some selected third-quarter financial numbers, showing record quarterly revenues and subscriber additions, along with a narrowing loss. Clearwire is scheduled to release its full third-quarter earnings report next Wednesday after the market closes.
