After seemingly kicking partner Clearwire to the curb a few weeks ago, Sprint Nextel brought its erstwhile 4G partner back into the limo Wednesday, announcing a deal to work with Clearwire on Long Term Evolution (LTE) network implementations in the future.
While there are no specifics yet, at the very least Sprint’s public re-embrace of the company that it is the majority owner of not only brought Clearwire’s stock back to life but it will probably make a lot of people stop wondering if Sprint was crazy for simply walking away from Clearwire and its huge stash of wireless spectrum. On a conference call to report earnings, Sprint CEO Dan Hesse described the Clearwire deal in these words:
We’re pleased to announce that we have signed a non-binding cooperation agreement with Clearwire to work together on the technical specifications of the Clearwire LTE network and to ensure a superb customer experience to Sprint customers on the Clearwire LTE network. The cooperation extends to the design and operations of the network and ensure seamless handoffs and service layer control that meets Sprint’s customer experience requirements, cover the cell site selection and timing of site builds and involves working with OEMs to design devices and to include certain chipsets in devices.
As you should each understand, it was necessary to reach this agreement in order to clear the way to begin the negotiations of commercial terms under which Sprint may utilize and pay for access to the Clearwire LTE network. A definitive agreement will allow Sprint to meet its objective to further improve the customer experience and to manage its fixed network costs by offloading some 4G usage from its own LTE network on to the Clearwire LTE network and thereby benefit from Clearwire’s large spectrum portfolio on a resale basis.
Those discussions are ongoing and the terms resulting from those discussions, if any, will be disclosed only at such time that a definitive and binding agreement has been reached by the parties.
No update on number of 4G subscribers
While we don’t have time to digest Sprint’s overall earnings picture today — Roger Cheng over at CNET has a pretty good breakdown of Sprint’s decent quarter and Hesse & Co.’s further clarity on iPhone costs — we are somewhat disappointed that Sprint didn’t break out any 4G subscriber add numbers like they did last quarter.
We are guessing we will have to once again wait until Clearwire reports its numbers (scheduled for next week) to get more “color” on how many 4G devices Sprint activated during Q3. The unofficial number right now is 1.9 million, though Hesse did not say that Sprint gave Clearwire 1.9 million reasons to love Sprint this quarter. We are guessing, though, that the LTE deal is enough love for the Clearwire folks for right now.