Sprint gives up majority vote at Clearwire

Sprint said it made the move to allay concerns about its exposure to Clearwire's debt

Sprint Nextel has given up its majority voting power at Clearwire to defuse investors' concerns about the danger to Sprint if Clearwire defaulted on its debt.

Sprint, which resells Clearwire's WiMax mobile broadband service under its own brand, kept all of its economic interest in the company, of which it owns 54 percent of the stock.

Clearwire continues to rack up losses after building out a national WiMax network that reaches 120 million potential subscribers. It has taken several steps to cut costs and assured financial analysts at the time of its last earnings report in May that it had enough cash and investments to continue operating for another year. But Sprint sought to ease investor worries about the impact on Sprint if Clearwire were to default on its debt.

According to a filing to the U.S. Securities and Exchange Commission on Wednesday, Sprint notified Clearwire that it would surrender some of its Class B voting stock in the company. The move will reduce Sprint's proportion of the voting stock from 54 percent to 49.8 percent, according to the filing. The voting shares have only nominal financial value. Sprint will keep its 54 percent financial ownership in the company.

"By taking this action, Sprint is proactively providing protection and flexibility with respect to its debt agreements and eliminating ongoing investor concerns about any potential cross-default risk," Sprint spokesman Scott Sloat wrote in an e-mail message.

Clearwire was formed in 2008 as a joint venture between the former Clearwire company and a group of investors including Sprint, Intel, Google, Comcast, Time Warner Cable and Bright House Networks. While Clearwire built out the network, Sprint and the cable companies have resold access to it. But the future of fast wireless among the companies may become more complicated, with both Clearwire and Sprint showing interest in LTE (Long-Term Evolution), which might be deployed in addition to or as a replacement for WiMax in the coming years.

Sprint and Clearwire recently completed a wholesale agreement after months of negotiations, under which Sprint will pay Clearwire about $1 billion over the next two years for its subscribers' use of the WiMax network. The two companies still have a productive working relationship, Sprint said on Wednesday.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags business issuestelecommunicationCarriersNetworkingwirelesssprint nextelmobileClearwirerestructuringWiMax

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Stephen Lawson

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?