Sprint could be a considerably stronger player in the U.S. wireless market, assuming the company is able to execute its plan to buy a controlling stake in Clearwire, revealed in a regulatory filing yesterday. Previously Sprint held just under 50% of Clearwire but would see that share rise above the 50% mark through its proposed purchase of Clearwire shares currently held by Craig McCaw’s Eagle River Holdings.
The news comes just days after Japan’s Softbank said it would acquire 70% of Sprint, and yesterday’s move undoubtedly was motivated by Softbank’s interest in Clearwire’s spectrum holdings which, according to news reports, are in the same frequency band as Softbank’s spectrum. Softbank has used that spectrum to build a TD-LTE network in its home market – and TD-LTE is the same technology that Clearwire has begun to deploy in the U.S.
Worldwide TD-LTE has been less widely deployed than FDD-LTE – and some of the carriers that have deployed TD-LTE appear to have done so simply as a matter of necessity. FDD-LTE, the choice made by most U.S. carriers deploying LTE, requires paired spectrum, with one half of the pair carrying the upstream signal and the other half carrying the downstream signal. Clearwire’s spectrum holdings are not paired.
Those holdings are considerable, however. According to one news report, Clearwire holds between 120 MHz and 150 MHz of spectrum in its markets – and that level of spectrum could go a long way toward meeting Softbank’s plans to deploy high-speed mobile data networks in the U.S. On a conference call to announce the Sprint deal on Monday, Softbank CEO Masayoshi Son reportedly said he would offer U.S. consumers a higher-speed mobile offering than what is available to them currently.
And although Sprint is deploying FDD-LTE, it shouldn’t be difficult for the company to offer handsets that work on its own network as well as Clearwire’s TD-LTE network. Major chipset vendors already offer components that can support both technologies. And by combining forces Softbank, Sprint and Clearwire should have considerable negotiating clout with device manufacturers.
According to a Powerpoint presentation about the Softbank-Sprint deal, the two companies combined would be the third largest wireless carrier worldwide – and that was before the Clearwire deal came along.
Sprint told GigaOm that the company’s plan to take control of Clearwire will not be fulfilled until a month from now, but as the author explains, Sprint has a high level of certainty that it will be.