Sprint put on its knight-in-shining-armor hat this morning, agreeing to pay $1.6 billion over the next few years to access Clearwire’s WiMax network. Without it, Clearwire would have had to choose between paying up on a $237 million interest payment or continuing to build out its LTE network — a necessity in terms of competition for both Clearwire and Sprint.
The deal consists of Sprint paying $926 million for unlimited 4G WiMax services between 2012 and 2013, reports MocoNews. In the meantime, Sprint is also pledging an advance of $350 million paid over a two-year period for Access to Clearwire’s forthcoming LTE capacity (as long as Clearwire hits certain benchmarks along the way). This will allow Clearwire to pay off its debt without derailing plans for its LTE network. That said, Sprint needs LTE just as desperately, so it only makes sense that Sprint would cover for its struggling partner.
The agreement allows for Sprint’s use of the WiMax network through 2015, though it’s only committed through 2013, at which point it will hopefully be transitioning to LTE. After 2013, the deal moves to a usage-based pricing model for access to the WiMax network. The deal also outlines long-term usage-based pricing models for Clearwire’s LTE services through 2012.
Sprint CEO Dan Hesse affirmed the relationship, issuing the following prepared statement:
These agreements are a result of the technical MOU we outlined during our third quarter results call and extend our relationship with Clearwire. It provides Sprint improved pricing, allows us to continue to provide WiMAX 4G services to our customers today and to new customers in the future and provides additional LTE capacity to help complement our Network Vision strategy and meet our customers’ growing data demands.
Clearwire’s $237 million interest payment was due today, so this deal couldn’t have come at a better time.