Sprint agrees to pay Clearwire $1 billion through 2012 for 4G accessAlex Wagner - Deputy Managing Editor, News Desk
Back in November of last year, Sprint and Clearwire got into a bit of a disagreement over 4G fees: Sprint didn't feel like it should be forced to pay Clearwire a monthly access fee for the over 800,000 EVOs and Epics that were being used outside of Clearwire's WiMAX coverage, while Clearwire felt that fees should be payed regardless. A little over five months later, the companies have finally come to an agreement that'll see Sprint forking over $300 million and $550 million in usage fees for 2011 and 2012, respectively, as well as an extra $175 million for 4G services to be used in the future.
Although most customers won't have any idea that there were ever any disagreements between Sprint and Clearwire over the WiMAX network, it's good to see the two companies finally get things ironed out so they can focus on other things, like the AT&T-Mobile deal. Plus, after encountering some issues stemming from a lack of funding late last year, I'm sure Clearwire is happy to be getting a healthy amount of cash in their pockets. For anyone interested in reading up on the deal further, the press release is waiting below.
SPRINT AND CLEARWIRE ANNOUNCE KEY ENHANCEMENTS TO THEIR LONG-TERM WHOLESALE REVENUE AGREEMENTS
Companies Amend Long-Term Agreement for Wholesale Pricing for Sprint's 4G Smartphones and All Other 4G Services, Including a Minimum Cash Commitment Totaling at Least $1 Billion to be Paid to Clearwire During 2011 and 2012
Overland Park, Kan. and Kirkland, Wash., April 19, 2011 (GLOBE NEWSWIRE) -- Sprint Nextel (NYSE:S) and Clearwire (NASDAQ: CLWR) today announced an amendment to their long-term agreement that establishes new wholesale pricing terms and provides Clearwire a minimum of $1 billion from Sprint to be paid during 2011 and 2012 for 4G wholesale services comprised of minimum usage commitments of $300 million in 2011, $550 million in 2012 and $175 million in pre-payments for 4G wholesale services to be used in 2011, 2012 and beyond. The parties expect the agreement to continue to drive the growth and collaboration of both companies' strategic 4G initiatives.
"We are pleased to reach this wholesale pricing agreement with Clearwire," said Dan Hesse, Sprint CEO. "We look forward to working with them under this new agreement to provide an expanded offering of 4G capabilities and solutions for Sprint customers."
"Sprint has been our biggest and most important customer and partner since we launched 4G services in the U.S. more than two years ago," said John Stanton, Clearwire's interim CEO. "Today's agreement further aligns Sprint and Clearwire's interests and lays the foundation for a continued, constructive relationship. We are pleased to have the resources and partnerships necessary to maintain our 4G leadership and leverage our significant spectrum and capacity for delivering mobile broadband services."
4G PRICING AND REVENUE COMMITMENTS
In addition to Sprint's commitment of $300 million in 2011, $550 million in 2012, and the prepayment of $175 million, the companies reached an agreement regarding wholesale pricing for Sprint devices that operate on both Sprint's 3G network and Clearwire's 4G network. This includes smart phones such as the award-winning HTC EVO™ 4G and Samsung Epic™ 4G and other dual-mode devices like the newly introduced Novatel Wireless MiFi® 3G/4G Mobile Hotspot 4082.
The agreement includes usage based pricing and volume discounts and is aimed at aligning the interests of both companies to enable growth for customers using smart phones and dual-mode devices. The agreement also includes minimum payments per 4G device.
Clearwire and Sprint also plan further collaboration to expand Sprint's capability to offer customized solutions using 4G technology. This is expected to allow Sprint to better serve its target enterprise and government customers with mission critical wireless broadband solutions both for mobility and local area network applications and expand its Machine-to-Machine (M2M) solutions for large and small businesses.
The agreement also expands the mutual re-wholesaling rights whereby both companies can resell the other's respective 3G and 4G networks to other parties. The agreement is expected to open up new market segments for both Sprint and Clearwire to both jointly and independently pursue.
The long-term partnership between Sprint and Clearwire has been one of the most productive in the U.S. wireless market. Together, the two companies deployed the first true 4G network in North America, leading the wireless industry's rapid progression to a mobile broadband future while making 4G a household word. The Clearwire 4G network is backed by some of the leading companies in telecommunications and technology, including Comcast, Time Warner Cable, Intel, Google and Bright House Networks.
With flexible all-IP network architecture and substantial wireless spectrum depth, the Clearwire 4G network is well positioned to continue serving the company's customers and wholesale partners' demands for fast, reliable, high-capacity mobile broadband service across the U.S.
About Sprint Nextel
Sprint Nextel offers a comprehensive range of wireless and wireline communications services bringing the freedom of mobility to consumers, businesses and government users. Sprint Nextel served more than 49.9 million customers at the end of 2010 and is widely recognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; offering industry-leading mobile data services, leading prepaid brands including Virgin Mobile USA, Boost Mobile, and Assurance WirelessSM; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. Newsweek ranked Sprint No. 6 in its 2010 Green Rankings, listing it as one of the nation's greenest companies, the highest of any telecommunications company. You can learn more and visit Sprint at www.sprint.com or www.facebook.com/sprint and www.twitter.com/sprint.
Clearwire Corporation (NASDAQ: CLWR), through its operating subsidiaries, is a leading provider of wireless broadband services. Clearwire's 4G network is currently available in areas of the U.S. where 120 million people live. Clearwire's open all-IP network, combined with significant spectrum holdings, provides an unprecedented combination of speed and mobility to deliver next generation broadband access. The company markets its 4G service through its own brand called CLEAR® as well as through its wholesale relationships with companies such as Sprint, Comcast, Time Warner Cable, and Best Buy. Strategic investors include Intel Capital, Comcast, Sprint, Google, Time Warner Cable, and Bright House Networks. Clearwire is headquartered in Kirkland, Wash. Additional information is available at www.clearwire.com.
Clearwire, CLEAR, and the CLEAR logo are trademarks or registered trademarks of Clearwire Communications LLC in the United States and/or other countries. All other company or product names are trademarks of their respective owners.
Via Phone Scoop