Negotiations between Clearwire and Sprint Nextel have been going on for months, sometimes heated and often playing out in the press. But the two companies have finally resolved their differences, with Sprint agreeing to pay $1 billion through 2012 to utilize the Clearwire high-speed network.
“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 remains Clearwire’s largest shareholder. And the deal comes after a list of ongoing problems at Clearwire, including layoffs, executive departures and a significant cash crunch.
With the new capital tied to the wholesale agreement, Clearwire interim CEO John Stanton tells The Wall Street Journal that the company now has enough cash for two years.
As part of the deal, Sprint has agreed to pay Clearwire $300 million in 2011; $550 million in 2012; and a prepayment of $175 million for 4G wholesale services, according to the press release. The companies also called the partnership “one of the most productive in the U.S. wireless market.”
And the deal comes amid mounting pressure on both Clearwire and Sprint, which face an altered landscape if regulators approve AT&T’s $39 billion buyout of T-Mobile USA.