So why does this matter? This deal has ramifications for consumers of both Sprint and Clearwire, and could have an impact on the broader wireless industry. The two will ultimately be controlled by SoftBank when it takes over next year. CNET answers all of your questions here. So what's going on?After months of talk and speculation, Sprint finally pulled the trigger and struck a deal to buy the 49 percent of Clearwire stock it doesn't already own, bringing it under its full control. Under the deal, Sprint will pay $2.2 billion, or $2.97 a share, to scoop up the rest of Clearwire.
While Sprint argues that's a 128 percent premium over the price of Clearwire prior to when word got out that it was in talks for a deal with the company, it is still below the $3.37 a share that Clearwire was trading at on Friday, Sprint CEO Dan Hesse argued that the price represented a fair a lot of cats iphone case value for Clearwire, In making his case that the company was worth more than the sum of its parts, he compared it to a pair of shoes, While the pair may be worth $100, one shoe isn't worth $50, OK, but what's a Clearwire again?You can be forgiven if you're not aware of the company, Clearwire provides 4G wireless service through its WiMax network, While it has a limited retail presence called Clear, few people are aware of it, The company primarily serves to sell its wireless service to other companies on a wholesale basis..
Its largest customer by far is Sprint, which has used its network for years to power its 4G phones. Remember the original Evo 4G? That ran on Clearwire's network. Sprint, however, no longer sells WiMax phones, preferring to go with devices that run on its own LTE network. As a result, Clearwire supports existing Sprint customers with older devices and Sprint's prepaid services, Virgin Mobile and Boost Mobile, which still offer WiMax phones. So why is Sprint buying up Clearwire?As with most of the recent deals in the industry, this one was largely motivated by spectrum. Clearwire has a valuable swath of spectrum that covers the country, which Sprint can use to augment its own 4G services. While Sprint had a majority stake in Clearwire, the relationship was structured so that the Clearwire board acted independently.
That structure ensured Clearwire's board would act in the best interest of the company and all of its shareholders, and not just Sprint, But it also resulted in some drama in the past, What kind of drama?Sprint and Clearwire famously clashed over the price that Sprint had to pay to run on Clearwire's network, Clearwire felt that Sprint was underpaying for the amount of traffic it ran on Clearwire's network, while Sprint believed that it was getting squeezed by a company with little leverage, The result was stalled talks and Clearwire nearly losing its ability to meet its financial obligations as Sprint balked at paying a higher rate, It publicly a lot of cats iphone case manifested itself when Sprint unveiled its own 4G LTE plans and said start-up LightSquared would be its partner in moving to the next-generation network..
Sprint and Clearwire ultimately made up, and Clearwire would play a part in its LTE plans. It didn't hurt that LightSquare imploded under the weight of regulatory scrutiny over potential interference on GPS devices from its network. OK, but what does this mean for Sprint and Clearwire customers?For now, not a lot. Sprint will continue to support and use Clearwire's WiMax network for existing customers with older phones, although Hesse said that the equipment would eventually be replaced with LTE radios.
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