Sprint Nextel Corporation and Clearwire have ended their disagreement about wholesale pricing when Sprint customers use the Clearwire network. The new agreement provides Clearwire a minimum of $1 billion in payments from Sprint, to be paid during 2011 and 2012 for 4G wholesale services.

The payments include at least $300 Million in 2011, $550 Million in 2012 and $175 Million in pre-payments for 4G wholesale services to be used in 2011, 2012 and beyond.

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Strategically, the announcment also includes a statement that “the parties expect the agreement to continue to drive the growth and collaboration of both companies’ strategic 4G initiatives.” That means Sprint is not walking away from its collaboration with Clearwire in favor of a major shift to use of LightSquared facilities, which some had speculated could be the case.

On the other hand, the deal also means either company is free to pursue new wholesale agreements with third parties, with or without the permission of the other partner. That means Clearwire could sell Sprint nationwide 3G services, or Sprint could sell wholesale Clearwire 4G services.
Left unresolved are Clearwire’s need for billions in additional investment to complete its nationwide network, and Sprint’s Long Term Evolution strategy.

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