Sprint's 4G network today depends on capital challenged Clearwire, which needs to build out its LTE network. The fix? Cut a deal with cable companies to help fund Clearwire.
According to Bloomberg, Sprint is trying to work out a deal where cable companies would back Clearwire and give it enough funding to build out an LTE network. In return cable companies---Comcast, Time Warner Cable and Brighthouse are already Clearwire investors---would be able to offer wireless services.
It's a bit sketchy how this deal would work. Sprint may buy the remaining shares of Clearwire it doesn't own, but such an arrangement could resolve a few issues.
- Sprint needs more firepower to compete with AT&T and Verizon. Cable giants reselling Sprint/Clearwire services would help that cause.
- Clearwire needs dough or it's done.
- And cable companies are going to need to address wireless service in a more comprehensive manner.
Looks like a winning deal for everyone depending on the cash involved. It remains to be seen if this funding actually arrives though.
- New Clearwire CEO's best skill: He knows how to raise dough
- Clearwire: Doubts about survival emerge; Shares to 50 cents?