Sprint swoops in with $1.6B deal to save Clearwire

Sprint, which owns almost half of Clearwire, has stepped up with a plan to spend $1.6 billion over the next four years that will help Clearwire stay solvent, and Clearwire said it would make its $237 million debt payment.

Sprint will pay Clearwire a total of $926 million, approximately two-thirds of which will be paid in 2012, for unlimited 4G WiMAX retail services during 2012 and 2013. That seems like a lot to pay for a dying 4G technology, but Sprint doesn’t have much choice, since it is harnessed to a CDMA network that can’t be upgraded easily to match the speeds currently offered by AT&T, Verizon and T-Mobile. The agreements also establish long-term usage-based pricing for WiMAX services in 2014, and Sprint will have access to Clearwire’s WiMAX network through at least 2015. Sprint said it plans to continue selling WiMAX devices with two-year contracts through at least 2012 and will support those devices through the life of the contract.

This is their best chance to pull together an LTE network after their failed bet on WiMAX and still counteract the growing power of AT&T and Verizon. Sprint also plans to launch network devices for its proposed LTE-Advanced network in 2013, which would put Sprint and Clearwire back on even footing with rivals that are currently offering LTE services.