Kirkland, Wash. – Clearwire and
Sprint have settled their differences over the price that they pay to each
other to resell their respective networks’ airtime, ensuring that the two
continue their relationship for the duration of their long-term reselling
agreement.
Money-losing Clearwire, which
operates a 4G Mobile WiMAX network, also gets minimum payments of $1 billion
from Sprint in 2011 and 2012, but Clearwire declined to say whether it would
use the money to resume an aggressive network buildout.
Late last year, the company
launched an aggressive round of cost reductions to conserve cash in case it was
unable to raise enough money to continue expanding its 4G network beyond
markets covering 130 million people. The goal of 130 million people is set to
be reached by the end of 2011. Money-raising options included selling off some
of its unused spectrum.
Clearwire did say, however, that
the two companies expect the agreement would “continue to drive the growth and
collaboration of both companies’ strategic 4G initiatives.”
The amended agreement “adds some
certainty to pricing,” a Clearwire spokesman said. Previously, the two
companies disagreed on the interpretation of some aspects of the agreement,
signed in 2008, he explained. The new agreement, added Sprint, is an amendment
to the two companies’ existing wholesale agreement, “which automatically renews
every five years.”
Besides the new wholesale pricing
terms, the amended agreement provides Clearwire a minimum payment of $1 billion
from Sprint during 2011 and 2012 for 4G wholesale services. The payments
reflect “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,” Clearwire said.
