Sprint CEO: Clearwire cuts doesn't mean that funding will stopAlex Wagner - Editorial Director of News and Content
Last week, Clearwire shared its third quarter results and, well, things weren't great. Even after increases in subscriber count and revenue, Clearwire announced that it would be cutting staff, stores, marketing, and halting plans to build out its WiMAX network beyond what was already planned. Many were curious what Sprint, which owns 54 percent of Clearwire, would think about the situation, and today CEO Dan Hesse spoke about it at the OpenMobile conference. Hesse said that Clearwire's reductions "doesn't mean that Sprint and other partners won't continue to fund Clearwire," although he didn't actually come out and say whether or not Sprint would actually provide funding. Clearwire also put out a statement about the situation recently, saying that the two companies are "in discussions" about new financing, although there is "no assurance" that any transactions will take place.
It's tough to guess exactly what will happen with Clearwire from this point forward. On one hand, Sprint is a majority owner of the company, and considering how invested they are with Clearwire and WiMAX, one would assume that they'd want to keep the company going in any way possible. On the other hand, it's not like Sprint is rolling in dough. After posting their own Q3 2010 results, we learned that the No. 3 carrier posted a net loss of $911 million. What do you all think is going to happen? Will Sprint give Clearwire more cash? Perhaps T-Mobile will be interested in helping them out?